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Finance woes weigh on consumer confidence

Simone Ziaziaris  |  03 Oct 2017Text size  Decrease  Increase  |  
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SYDNEY - [AAP] Consumer confidence has slipped in the past week, weighed down by sentiment around current and future finances and as uncertainty about longer-term prospects lingers.

The ANZ-Roy Morgan Consumer Confidence Index fell 0.6 per cent to 113.4 in the week to October 1, with improved sentiment towards economic conditions offset by a fall in households' views of their own finances.

Consumers were more optimistic about current and future economic conditions in the past week--up 2.5 per cent and 2.0 per cent, respectively--but households' views towards both current and future financial conditions fell 1.6 per cent.

ANZ Senior Economist Felicity Emmett said that while confidence in financial conditions fell, it remains above its long-term average.

"Which is encouraging given the headwinds households face in terms of high debt levels, low wages growth and higher energy costs," Ms Emmett said on Tuesday.

She said a rise in confidence around Australia's economy wasn't enough to outweigh the prior week's losses when views towards future economic conditions slipped 6.5 per cent, reflecting ongoing concerns around household finances if wage growth remains weak.

"Though sentiment towards overall economic conditions currently sits above its post-budget low, consumers remain uncertain about the longer-term prospects," Ms Emmett said.

The time to buy a household item index dropped 3.3 per cent, unwinding the previous week's lift, and remains below its long-term average.

That's in line with expectations that August's retail sales will likely disappoint after a period of strength earlier in the year.

Meanwhile, inflation expectations rose 0.1 per cent to 4.5 per cent on a four-week moving average basis.

 

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