Along with major purchase intentions.
Consumers are recovering their confidence, albeit slowly, with the outlook for current financial conditions and major household purchases moving upwards. Current financial conditions rose 0.8%, while future financial conditions were more upbeat, rising 3.6%. The ‘time to buy a household item’ index also rose 1.1% after four consecutive weekly declines.
However, future economic conditions acted as a drag on the ANZ-Roy Morgan survey of consumer confidence index, with both the sub-indices declining.
ANZ chief economist, Richard Yetsenga said while consumer confidence improved last week, an entrenched decline in inflation expectations was an emerging trend. “The 15% fall in petrol prices over the past three months may be a short-term influence on inflation expectations, but the decline since 2017 is concerning given the improvements in the labour market,” he said.
“Inflation expectations are close to the record low of 3.9% recorded in 2016, not long after the Reserve Bank last cut interest rates. In the US also, consumers’ inflation expectations haven’t responded to the tightening labour market as might have been expected over the past year. Deflationary forces are proving to be stubborn and would be a surprise to central banks,” he said.