Consumers say they’re worried, but spending high for the moment
Consumers may say they are worried about their financial positions but spending has so far remained elevated despite soaring prices and interest rate hikes.
Discretionary spending is drying up (Photo: AAP Image/Dan Himbrechts)
The latest string of surveys may provide further insights into the minds of consumers, with reports on consumer sentiment due from Commonwealth Bank and ANZ/Roy Morgan on Tuesday.
eToro market analyst Josh Gilbert said last week’s 50 basis point rate hike might show up in confidence figures, but the recent 1.3 per cent jump in retail sales showed consumption wasn’t as low as surveys kept suggesting.
“It’s important to remember to look at what consumers are doing and not always at what they’re saying,” Gilbert said.
However, Westpac economist Bill Evans said growth in consumer spending was likely to ease in coming months.
“The reopening effect will begin to fade, and the recent interest rate increases will start to impact households,” he said.
The consumer sentiment survey from Westpac/Melbourne Institute showed sentiment tumbling another three per cent in August, with soaring inflation and falling house prices key concerns.
This brought the index down to lows seen during the pandemic and the global financial crisis.
Also due on Tuesday is travel data from the Australian Bureau of Statistics, as well as data estimating the number and value of homes.
