SYDNEY — Australian consumer confidence is in the worst sustained slump on record, according to a weekly survey by the ANZ Bank and pollster Roy Morgan.
Consumer confidence fell 1.1 points over the week, completing six consecutive months below 80 points, something never before seen in the data.
The weaker outcome comes despite the Reserve Bank of Australia’s decision to keep official interest rates on hold at 4.10% for a third month in a row, and news that second quarter economic activity was stronger than expected, pointing to a soft landing for the economy.
The result comes as households feel the intense sting of surging mortgage interest rates, with huge numbers of borrowers migrating from ultra-low fixed interest rates to sharply elevated variable rates as the earlier deals from banks expire.
The downcast mood of consumers is somewhat surprising given that unemployment remains near its lowest levels in half a century while job vacancies remain well above levels seen prior to the Covid-19 pandemic.
Economists are also increasingly confident that the RBA won’t increase interest rates further, having lifted the OCR by 400 basis points since May last year.
Inflation also appears to be in sharp retreat, which should soon turn the public conversation toward the possibility of interest rate cuts by mid-2024.
There was a sharp fall in confidence amongst renters over the week, the data showed. And while consumer confidence remains lowest for those households with a mortgage, confidence amongst this group has lifted to its highest level in five months, according to the data.
Weekly inflation expectations fell 0.1 percentage points, to 5.2%. Its four-week moving average was unchanged at 5.3%, the survey showed.
Sentiment around current financial conditions declined 0.8 points, while future financial conditions were up 2.2 points, partially offsetting a 3.0 point decline the week before. Current economic conditions gained 1.2 points over the week, while future economic conditions dropped 4.7 points.
In response to a question about the willingness of consumers to buy a major household item, the index decreased by 3.3 points over the week.
The weekly ANZ-Roy Morgan Australian consumer confidence rating is based on 1,505 interviews conducted online and over the telephone during the week to Sunday.