The latest ANZ-Roy Morgan consumer confidence data revealed it is riding high in Perth but has dropped in Sydney and Melbourne, by 4.7% and 1.7% respectively, well below the national average.
Overall consumer confidence declined 1.7%, now at sitting at its lowest level for three months, driven by the falls in the two biggest cities. Consumer confidence was also above average in Brisbane and Adelaide, interestingly the states that have so far managed to keep COVID-19 at bay.
Falls in consumer confidence were also felt in major household buying intentions as well as across other parts of the index.
It represents the fifth straight decline that saw sentiment dropping almost 10% from its high at the end of May, ANZ head of Australian Economics, David Plank said.
“The rise in pandemic related deaths in Victoria and new case numbers rising in Sydney seem to be sapping confidence,” he said. “The reductions in JobKeeper and JobSeeker payments from the end of September may have also weighed, with ‘current economic conditions’ falling sharply and the improvement in ‘current finances’ stalling at a low level.”
Inflation expectations also rose again, with the four-week moving average at its highest level since mid-May. “This lift comes just ahead of the Q2 CPI data, which is likely to show the biggest ever fall in headline inflation,” Plank warned.