Consumer sentiment improving

Some interesting data out today.

Consumer confidence was up for the second week in a row, but remains at very weak levels. A combination of a strong labour market and an easing of policy by the RBA seem to have combined to offset the gloomy economic conditions.

On the same note inflation expectations eased slightly from last week, down to 6.3%. However, they are still far too high and have now remained above 5% for all of 2022. There's a not insignificant risk that inflation expectations are becoming anchored well above the RBA's target range.

Time to buy a major household item also rebounded a strong 9.2%, after a cumulative decline of 13 per cent over the previous six weeks. This could be a indication of rising consumer sentiment, or maybe just an awareness that Black Friday sales are incoming.

While this is a pretty good print, these weekly indicators are quite noisy and we've seen more than a few misleading upward turns in consumer confidence this cycle. We need to put together a couple months with a consistent trend before we can be confident things are improving.