Consumer confidence has declined despite a recent rate cut by the Reserve Bank of Australia (RBA). The confidence index dropped 1.8 points last week, settling at 87.0 points. In contrast, the four-week moving average saw a slight increase, rising 0.9 points to reach 87.9 points.
Weekly inflation expectations experienced a minor rise of 0.2 percentage point, bringing it to 4.7 percent, while the four-week moving average for inflation ticked down by 0.1 percentage point to match at 4.7 percent.
The report indicated a decline in various financial conditions indices. 'Current financial conditions' over the past year decreased by 1.5 points, and 'future financial conditions' for the next year fell by 1.4 points.
Economic confidence also showed signs of weakening with 'short-term economic confidence' for the upcoming year dropping by 4.9 points and 'medium-term economic confidence' over the next five years easing by 2.7 points.
On a more positive note, the subindex measuring whether it is an opportune time to purchase major household items increased by 1.7 points.
ANZ Economist Sophia Angala commented on these developments: "ANZ-Roy Morgan Australian Consumer Confidence fell 1.8 points last week to 87.0 points. There was a broad-based fall across the subindices despite the Reserve Bank of Australia (RBA)’s 25 basis point rate cut last week."
Angala further elaborated on potential influences behind these figures: "This may have been influenced by the RBA’s post-meeting commentary being more dovish than anticipated and the weaker outlook for growth, employment and inflation it expects from global trade uncertainty."
She remains optimistic about future negotiations: "We continue to expect progress to be made in negotiations between the US and its trading partners. This combined with Australia’s expected resilience, particularly with regards to the labour market, will likely lead to a relatively shallow easing cycle."
Sophia Angala forecasts additional monetary policy adjustments: "We expect a 25 basis point rate cut in August and another in the first quarter of 2026."