Consumer confidence in Australia has increased, climbing by 4.7 points last week to reach 89.8 points. The four-week moving average also recorded an upward movement, rising 1.0 point to 87.5 points. The improvement in consumer sentiment follows a cut in interest rates by the Reserve Bank of Australia (RBA).
Weekly inflation expectations decreased by 0.7 percentage points to 4.2 percent, with the four-week moving average showing a decline of 0.2 points to 4.6 percent. Additionally, the ‘current financial conditions’ index over the last year rose by 7.5 points, while the ‘future financial conditions’ for the next 12 months saw a 10.0-point increase.
Improvements were also noted in economic confidence indicators. ‘Short-term economic confidence’ for the next 12 months increased by 4.6 points, and ‘medium-term economic confidence’ for the next five years rose by 1.6 points. The subindex on the ‘time to buy a major household item’ noted a minor increase of 0.1 points.
"ANZ-Roy Morgan Australian Consumer Confidence rose 4.7 points last week to 89.8 points, its highest level since May 2022," stated ANZ Economist Sophia Angala. The economist attributed the rise across all subindices to the RBA's recent 25 basis point rate cut and positive employment data.
Confidence levels differed among housing categories. Among mortgage holders, sentiment surged by 10.7 points, reaching its highest point since early May 2022, before the onset of the RBA’s rate hiking cycle. This confidence now surpasses that of outright homeowners, where sentiment largely remained steady. Renters also exhibited increased confidence, with a rise of 4.0 points. However, their confidence levels remain the lowest among the three housing groups.
Ms. Angala predicted a gradual upward trend in consumer confidence throughout the year, supported by tax cuts, easing inflation, and the RBA’s cycle of rate reductions.
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