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Consumer sentiment up 5.6% over past three weeks as holiday season approaches

Consumer confidence might be at historically low levels, but things have perked up for three weeks in a row, according to the weekly survey from ANZ and Roy Morgan.

With Black Friday behind us and Christmas shopping ahead, the sentiment gauge is telling us that all is not gloom in shopping land with the measure now up 5.6% over the past three weeks.

As David Plank, head of Australian economics for ANZ, says, sentiment about both the sense of how households are faring versus a year ago and how they expect to be travelling next year is on the up.

(We saw ABS’s October retail sales data drop 0.2% last month for the first decline in 2022 so the present is where the caution may be clustered.)

Probably more pleasing for the RBA, though, is that inflation expectations remain subdued. (The gap between consumer and wage price indexes was at a record 4.2% in the September quarter, so that might explain the funk.)

As we saw yesterday, motorists are also paying less for their fuel lately.

At the retail levels, they’re the lowest in about four months – and the way energy markets are turning globally (China Covid lockdowns v protests being the latest prompt), they might fall further in the coming weeks.

Given the air fares, more people might be on the roads this Christmas.

What’s this all mean for interest rates, you ask? Well, investors are still expecting about another 100 basis points of increases, including 25bp next Tuesday. (Economists aren’t so twitchy.)

Meanwhile, is the RBA governor, Philip Lowe, really the devil incarnate, or just a naughty boy? Or perhaps misunderstood? We wonder here if the pile-on of late is really deserved:

Related: Philip Lowe is the easy fall guy for our economic woes. But maybe we should have listened to him more closely | Peter Hannam