More bad news for the Government and the economy more worryingly as the ANZ-Roy Morgan Weekly Consumer Confidence Index fell another 3.2% over the past week.
This brings the cumulative one-month fall in confidence since the Government began leaking its various measures and policies to a “sharp” 14%, which the ANZ economic team says is the steepest decline over a four-week period since the series became weekly in October 2008.
That is quite a heady statistic when you think about it.
When Lehman Brothers collapsed in September 2008, the Australian government was forced to guarantee all Australian banks around mid-October 2008. The markets went into freefall until March 2009.
So to have the biggest cumulative 4-week fall in an index which includes the depths of the GFC will worry the RBA and should worry the Government.
The ANZ said that consumers are worried about their financial positions:
Respondents’ perceptions of ‘financial situation compared to a year ago’, which is most correlated with households’ spending growth, suggests consumer spending could soften in the near term. This subindex fell 3% last week and has weakened notably over the past two months. At this stage, ANZ’s bottom line for the household consumption outlook remains that consumer spending will improve this year, although the Budget – due to both the direct and indirect impacts – may weigh on the speed of that recovery.
Justin Fabo, ANZ’s head of Australian economics (Corporate and Commercial), said in a note to clients that “The persistence of this fall will, however, be important to the assessment of the consumer spending outlook. We will continue to watch consumer confidence closely in coming weeks.”
Indeed it will, as will the release of the Monthly Westpac Consumer Sentiment numbers tomorrow.