Australian weekly consumer sentiment falls to 115.3, household finances likely to remain under pressure

Australian weekly consumer sentiment dropped after falling in the earlier week. ANZ-Roy Morgan Australian Consumer Confidence fell 3.5 percent to 115.3 last week, after a 2.6 percent decline in the earlier week. For the second consecutive week all subdindices recorded declines, with confidence around economic conditions falling sharply.

Households’ views towards current economic conditions dropped 5.5 percent last week, on the back of a 6 percent previously, bringing the sub-index to an eight-week low of 107. Meanwhile, perceptions of future economic conditions dropped 8.8 percent to 106.3, which is a 13-week low.

Consumers were less positive about financial conditions this week. Views towards current and future conditions dropped 1.6 percent and 1.3 percent, respectively last week after a 2.6 percent and 1.8 percent drop previously. However, both indices continue to be above their long term averages.

Confidence around the ‘time to buy a household item’ fell for the fifth straight week, dropping 0.9 percent to 135.6. Inflation expectations continued to be stable at 4.4 percent on a four-week basis.

“The deterioration in views towards financial conditions, particularly current conditions, is a little worrying. In the last few weeks, views towards current conditions have retraced about half of their gains since their recent low point in mid-2017. It is likely that household finances will remain under pressure until a material pick-up in wage growth and as such household consumption remains an area of uncertainty in the outlook for 2018”, said ANZ’S Head of Australian Economics, David Plank.

At 13:00 GMT the FxWirePro's Hourly Strength Index of Australian Dollar was neutral at -37.3417, while the FxWirePro's Hourly Strength Index of US Dollar was highly bullish at 107.423. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex

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