Household spending continues at pace despite dropping confidence

Confidence among inflation-shocked shoppers has collapsed this year as fast as during the depths of the pandemic and the advent of the global financial crisis, but consumers are still not winding back their spending.

It is now 19.7 per cent down on where it was in December, a fall similar to the 20.8 per cent drop in the early stages of the pandemic, the 20.5 per cent fall in the early 1990s recession and worse than the easing in the early 1980s recession . The bank’s chief economist, Stephen Halmarick, said some of the increase was driven by the lift in prices now being endured by consumers, including petrol, along with increased spending on education and household services.

The ANZ-Morgan weekly measure of consumer sentiment fell 2.5 per cent over the past seven days and is now back where it was in the early stages of COVID.lift in official interest rates had weighed on sentiment. “Since then, confidence amongst mortgage holders has fallen 25 per cent, while confidence for renters is down just 4 per cent. Inflation expectations lifted as petrol prices hover near record highs,” she said.

swrighteconomy rachelclun ***spending is the same, you just get three pieces of clothing now, not four.

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