Trump tariffs continue to sow confusion
Confidence among Australian consumers remains stubbornly weak, if the latest ANZ-Roy Morgan Australian Consumer Confidence poll is anything to go by.
Confidence fell 2.1 points last week to 83.4 points, while the four-week moving average decreased by 0.5 points to 85 points. The data was collated from over 1,000 interviews in the week to Sunday.
Weekly inflation expectations rose 0.2 percentage points to 5.1%, while the four-week moving average edged up 0.1 percentage points to 4.8%.
Current financial conditions declined two points and future financial conditions dropped 7.1 points.
“Households are also feeling less confident in the economic outlook,” said ANZ Economist Sophia Angala. “We expect growth in the US and China to slow in 2025, following increased economic uncertainty from US tariff announcements.”
US President Donald Trump’s global tariff regime has caused confusion and volatility across the globe. A potential upside, however, is that they are also increasing the likelihood faster interest rate cuts from the Reserve Bank of Australia (RBA).
A recent poll by the Australian Financial Review showed that 29 out of 40 economists expect a rate cut when the Reserve Bank of Australia meets on 20 May. If accurate, the cut would be the second this year and would bring the cash rate down to 3.85%.
“The implications for Australia (of the tariffs) are likely to flow from the impacts on global growth and local confidence, and it appears that the upward trend in the ANZ-Roy Morgan Australian Consumer Confidence series from rising disposable incomes has been weakened by global uncertainty.”
The results align with the latest NAB business confidence indicator, which plummeted to -3 in March.
