The latest report by ANZ Bank and pollster Roy Morgan reveals a concerning decline in consumer confidence in Australia. With increasing financial strain on households and signs of a weakening job market, consumers are becoming more hesitant about their purchasing intentions.
According to the survey, consumer confidence dropped by 0.3 points over the week. Of particular concern is the dramatic decrease of 8.7 points in sentiment around buying major household items, erasing the previous week's gain of 7.1 points during the Black Friday sales.
ANZ Senior Economist, Adelaide Timbrell, highlights that a significant reversal in inflation is necessary to uplift the ANZ-Roy Morgan Australian Consumer Confidence in 2024. This suggests that the current economic conditions need significant improvement to restore consumer optimism.
In a noteworthy shift, confidence among homeowners has exceeded that of renters for the first time since October 2022. However, those paying off their homes still maintain the lowest level of confidence on a four-week average.
Another cause for concern is the 0.2 percentage point rise in weekly inflation expectations, reaching 5.6% last week. This increase underscores worries that inflation expectations are becoming unanchored.
The Reserve Bank of Australia (RBA) is anticipated to maintain the official cash rate at 4.35% during its policy meeting announcement at 0330 GMT. However, a hawkish bias warning regarding persistent domestic inflation is expected to be retained.
The ANZ-Roy Morgan Australian Consumer Confidence Rating is based on 1,530 interviews conducted online and over the telephone throughout the week, concluding on Sunday.