Australian Consumer Confidence Falls as Pessimism Grows

Australian consumer confidence took a hit last week as households expressed increasing pessimism about current and future economic and financial conditions. According to a survey conducted by the ANZ Bank and pollster Roy Morgan, consumer confidence dropped by 3.7 points, erasing gains from the past two weeks.

Concerns across the Board

ANZ Senior Economist Adelaide Timbrell noted that the decline in confidence was widespread, with all subindices experiencing declines. Of particular note were the significant drops among homeowners, with confidence among all homeowners falling by 3.0 points and by 7.2 points among those still paying off home loans.

Uncertainty Surrounding Interest Rates

The Reserve Bank of Australia has maintained the country's cash rate for four consecutive months, but hopes for rate cuts were dampened by recent minutes from the U.S. Federal Reserve's meeting. The minutes showed that officials were divided on whether there would be a need to further raise rates this year.

Inflation Expectations on the Rise

The ANZ-Roy Morgan survey revealed that weekly inflation expectations rose by 0.2 points to reach 5.3 points.

Outlook for Financial and Economic Conditions

Sentiment towards both current and future financial conditions declined, with a drop of 5.6 points and 4.8 points, respectively. On the other hand, current economic conditions saw a decrease of 3.2 points, while future economic conditions increased by 3.5 points.

Methodology and Analysis

The ANZ-Roy Morgan Australian consumer confidence rating is based on 1,493 interviews conducted online and over the telephone throughout the week leading up to Sunday.