Sentiment stalled
Consumer sentiment was down -8.3 per cent from a year earlier in June, according to Westpac's latest survey, while the time to buy a major household item dropped sharply to be down -15 per cent from a year earlier.
The index has been running at recessionary lows for most of the past year, reported Westpac.
The unemployment expectations index continued to rise to be 21 per cent higher over the year (and up 32 per cent since the tightening cycle began) with households increasingly worried about the security of their jobs.
House price expectations continued to rise in June, in spite of rising mortgage rates, with the index soaring since the October lows.
This reflects record population growth and a shrinking capacity and desire to build new homes under current conditions and policy settings.
Source: Westpac
NAB also released its May business survey today, and all components are pointing to a slowdown, with business confidence, business conditions, stocks, and forward orders all falling significantly.
Source: NAB
Notably, forward orders are taking a renewed shellacking.
There are few instances of forward orders turning negative outside of a downturn in the economy, presenting a risk of an accelerating downturn in business conditions, according to NAB.
Source: NAB
There was mixed news for prices, but anecdotally there's a lot of discounting happening around supermarkets, which is likely to be a sign of what's to come, while fuel prices should also fall over the months ahead.
Stock market performance and news releases suggest that there's a retail crunch ahead, which will naturally result in more discounting and price cuts.
Exhibit A from Eli Greenblat at The Australian:
Domino's Pizza is offering half-price pizzas this week, and is cutting its 7 per cent delivery fee, which had been scaring off increasingly cost-conscious consumers.
Lower prices ahead :-)
