The ANZ-Roy Morgan Consumer Confidence Index dropped 0.5%, now at its lowest level for over two months, and 24.3% lower than a year ago.

Driving the small fall was a decline in confidence about whether now is a good or bad time to make a major household purchase.

This decline in consumer confidence was building on the falls seen over the previous two weeks.  It is now down some 6% from its level in mid-June as it recovered from the historic low seen at the end of March, according to ANZ head of Australian Economics, David Plank.

“The deteriorating conditions in Melbourne and the renewed lockdown are most likely the primary contributor to the turn in sentiment. The biggest fall has been in ‘current economic’ conditions, which are down around 15% over this period,” he said.

In contrast, sentiment toward personal finances is close to unchanged, highlighting the role that the massive fiscal stimulus has played in shielding people from the direct fall-out of the economic slump triggered by the health response to the pandemic.

“How this fiscal support will evolve over the months ahead is the most critical decision facing the government and the economy,” Plank said.