Australian weekly consumer sentiment rebounds for fourth straight week

Australian consumer sentiment improved for the fourth consecutive week. The ANZ-Roy Morgan Australian consumer confidence index rose 1.6 percent last week, the fourth straight gain. All subindices rose except ‘time to buy a household item’, which fell 1 percent.

The headline rise was mainly due to a big rise in ‘current economic conditions’, which rose 10.3 percent, while ‘future economic conditions’ rose 0.5 percent.

Financial conditions rebounded with ‘current finances, rising 1 percent, while ‘future finances’ rose 0.3 percent. Meanwhile, ‘inflation expectations’ dropped to 3.3 percent (four-week moving average).

“Consumer confidence improved for the fourth week straight to its highest level in more than three months. By far the largest contribution came from “current economic conditions”, which has jumped almost 20 percent over the past fortnight. This likely reflects expectations for significant additional spending to be announced in next week’s federal budget. In the Treasurer’s speech last week, he outlined an updated fiscal strategy focussing on the jobs and economic recovery, rather than repairing the fiscal position, until the unemployment rate is “comfortably” back under 6 percent. In contrast, “current financial conditions” has effectively plateaued for several weeks. This indicator will be one to watch as JobSeeker and JobKeeper payments are reduced”, commented ANZ senior economist, Catherine Birch.