Consumer confidence across Australia has fallen this week after higher-than-expected inflation data was shared by the Australian Bureau of Statistics (ABS).
ANZ-Roy Morgan Consumer Confidence dropped 2.6 points to 74.9 in late August – its first drop after four consecutive gains. Confidence is now 13.1 points lower than a year ago, and just 2.5 points above the 2026 weekly average of 72.4.
This came as ABS data showed through-the-year inflation growing by 3.5 per cent in July, with trimmed mean inflation up 3.6 per cent, leading economists to issue warnings of a potential cash rate hike later in September.
ANZ economist Sophia Angala said the decline was broad-based, but was led by decreasing confidence in future economic conditions.
“This may have reflected last week’s stronger-than-expected July CPI release. Although weekly inflation expectations were unchanged last week, the series has trended higher in recent weeks,” Angala said.
“Given persistent inflation and the resilience in household spending, we now expect the RBA to hike the cash rate by 25bps to 4.60 per cent in November. Against a backdrop of weak consumer confidence, a November rate hike is expected to weigh further on consumer spending over the near term.”
An analysis by state shows confidence decreasing in New South Wales, Victoria, Western Australia, and South Australia, but increasing slightly in Queensland.
Now 18 per cent (up 1ppt) of Australians say their families are ‘better off’ financially than this time last year, compared to 50 per cent (up 1ppt) that say their families are ‘worse off’.
Views on personal finances over the next year were virtually unchanged this week, with 23 per cent (up 2ppts) of respondents expecting their family will be ‘better off’ financially this time next year, while 40 per cent (up 3ppts) expect to be ‘worse off’.
Just 7 per cent (down 1ppt) of Australians now expect ‘good times’ for the economy over the next year, compared to 40 per cent (up 5ppts) who expect ‘bad times’.
Australians’ views about the economy’s performance over the longer-term of the next five years also deteriorated, with just 8 per cent (down 1ppt) of Australians expecting ‘good times’ for the economy over the next five years compared to well over a quarter (29 per cent – up 2ppts), expecting ‘bad times’.
Net buying intentions decreased this week, with 20 per cent (unchanged) of respondents saying now is a ‘good time to buy’ major household items compared to a rising 43 per cent (up 4ppts) that say now is a ‘bad time to buy major household items’.