Australian consumer confidence rose 2.2 per cent last week after dropping to its lowest levels since October 2020, while respondents' confidence in 'current financial conditions' jumped 6.3 per cent.
According to a survey conducted by ANZ (ASX: ANZ) and Roy Morgan, this uptick pushed consumer confidence just above neutral at 100.1 for the week of 17-23 January, which is still below the four-week average of 103.1.
The confidence level is still well below the monthly average of 112.4 since 1990, but on a positive note the amount of respondents willing to by a major household item increased by 6.3 per cent after a 15.8 per cent drop in the first fortnight of 2022.
"The recovery came in the same week that the unemployment rate was reported as dropping to its lowest in more than 13 years," says ANZ head of Australian economics, David Plank.
The more optimistic sentiment however was not consistent across the board nationwide.
"COVID cases appear to have peaked, though deaths unfortunately made new highs. Confidence was driven by rises of 7.7 per cent in Victoria, 8.8 per cent in WA and 3.7 per cent in Queensland," Plank explains.
"But it dropped in NSW (-2.4 per cent) and SA (-2.6 per cent). The live entertainment of the Australian Open tennis and great weather might have added to Victoria’s positive outlook.
"Ahead of the Q4 2021 CPI (consumer price index) data, inflation expectations recorded a 0.1ppt rise to match the recent high of 5 per cent reached in December."
The Australian Bureau of Statistics (ABS) has reported today that the CPI rose 1.3 per cent in the December 2021 quarter and 3.5 per cent annually, with the most significant price rises coming from new dwellings (+4.2 per cent) and automotive fuel (+6.6 per cent).
"Shortages of building supplies and labour, combined with continued strong demand for new dwellings, contributed to price increases for newly built houses, townhouses and apartments," says the bureau's head of prices statistics Michelle Marquardt.
"Fuel prices rose again in the December quarter, resulting in a record level for the CPI's automotive fuel series for the second consecutive quarter."
Domestic holiday travel and accommodation (+4.8 per cent) also contributed to the December quarter CPI increase, reflecting increased demand due to the easing of domestic border restrictions in late October and the lead up to the Christmas holiday period.
Prices of goods rose 4.3 per cent through the year, while those of services rose 2.3 per cent.
"Annual price inflation of goods surpassed that of services in the December quarter and was the highest since 2008," Marquardt explains.
"Fuel prices were the largest contributor to higher goods inflation. More broadly, global supply chain disruptions and material shortages, combined with rising freight costs and high demand, contributed to price increases across a wide range of goods including dwelling construction materials, motor vehicles, furniture and audio-visual equipment.
"Annual trimmed mean inflation is the highest since 2014, reflecting the broad-based nature of price increases, particularly for goods."
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