Inflation expectations lifted 0.2 points to 5.1 percent, the highest since April 2023. Photo: Unsplash/ Rupixen
Consumer confidence continues to track down amid worries about the high cost of living.
The ANZ-Roy Morgan Consumer Confidence Index (PDF) dropped four points to 94.7 last month, as the midwinter blues set in.
Anything under 100 points indicates more pessimists than optimists.
Inflation expectations lifted 0.2 points to 5.1 percent, the highest since April 2023.
"That's well out of line with headline inflation of 2.7 percent, but some prominent necessities are increasing at a much higher rate than that, including food (4.2 percent), insurance, electricity and council rates," ANZ chief economist Sharon Zollner said.
The proportion of households who thought it was a good time to buy a major household item remained weak with a one-point drop to -8, leaving the retail sector struggling to make sales.
"At this stage of the business cycle, inflation in necessities is crowding out discretionary spending," Zollner said, noting annual food price inflation was 4.2 percent in June.
However, she said there was light at the end of the tunnel with more people rolling onto lower mortgage rates, and high farmer incomes supporting the regions.
"While inflation is clearly front of mind for households, we do expect things to ease on that front towards the end of the year."
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