Consumer confidence in Australia saw a slight decrease last week, dropping by 1.3 points to reach 89.3 points, according to the latest ANZ-Roy Morgan survey. Despite this weekly decline, the four-week moving average increased by 0.7 points to 88.2 points, marking its highest level in more than three years.
Weekly inflation expectations decreased by 0.2 percentage points to 5%, while the four-week moving average for inflation expectations also settled at 5%. In terms of financial conditions, perceptions of current financial situations over the past year fell by 1 point and future financial conditions for the next twelve months dropped by 1.8 points.
Short-term economic confidence regarding the next twelve months rose by 2 points, whereas medium-term economic confidence for the next five years declined by 2.9 points. The subindex measuring whether it is a good time to buy a major household item fell by 3 points.
"While ANZ-Roy Morgan Australian Consumer Confidence recorded a small fall last week, on a four-week moving average basis the series is at its highest level in more than three years. Over the past month, confidence has risen 2.8 points, driven by a 6.5-point lift in household confidence in the economic outlook over the coming year. There has also been a 4.1-point improvement in how households are feeling about their finances compared to last year," said ANZ Economist Madeline Dunk.
"There are signs the gradual lift in confidence is flowing through into household spending, with recent data looking robust. Rate cuts, falling inflation and a continual improvement in real household incomes should all support consumer confidence," she said.
"We expect the RBA to cut rates 25 basis points today and again in November, taking the cash rate to 3.35%."