SYDNEY–Australian consumer confidence fell last week to its lowest since the 1970s oil price shocks amid a further tightening of physical distancing rules to battle the coronavirus pandemic.
Consumer confidence in the weekly ANZ-Roy Morgan survey dropped by 9.8% over the past week to its lowest level since the inception of the survey in 1973.
The pandemic is expected to plunge Australia’s resource-rich economy into recession for the first time since the early 1990s.
The survey showed confidence in current financial conditions fell 16.1% from the prior week, while sentiment toward current economic conditions declined by 9.5%. That followed a 37% drop a week earlier.
Confidence in buying a major household item plunged 23.8% over the week.
ANZ’s Head of Australian Economics, David Plank, said there were some glimmers of hope in the data, with expectations related to future finances up marginally while inflation expectations nudged higher.
The government’s move Monday to spend 130 billion Australian dollars ($80 billion) to subsidize wages and keep workers on payrolls should see some stabilization in confidence this week, Mr. Plank said.
Treasurer Josh Frydenberg has rolled out three consecutive fiscal stimulus packages in unprecedented moves to soften the blow of the pandemic. Economists predict unemployment will surge well beyond 10% with months.
Electronic transactions data shows that there are still hot spots in the economy.
Shoppers are continuing to mob grocery stores for basic items, while sales of alcohol have also jumped, according to Gareth Aird, economist at the Commonwealth Bank of Australia.
Spending on alcohol in the past week was 34% higher than a year earlier, confirming anecdotes that households have been stockpiling beer, wine and spirits, Mr. Aird said, citing the bank’s card spending data.
Spending at bottle stores–takeaway liquor outlets–was up a staggering 86% on the same week a year earlier.
CBA said card spend on transport was down by 24% compared with the year before, reflecting that many people are working from home and people who congregate in public could face big fines.
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