Consumer anxiety moderated in Q1 2019 but remains above year earlier levels. Cost of living remains the main cause of anxiety, underlining the disconnect between low levels of economy-wide inflation and consumer focussed costs. With an election looming, anxiety over government policy was much higher than year-earlier levels.

New research shows many consumers may be feeling the pinch from stagnant income growth. Many are also struggling to save or make inroads into reducing their debt levels. This could help explain why (despite lower anxiety) spending behaviours were more conservative in Q1 2019. Despite this, around 1 in 4 Australians spent more (or much more) than they earned.

Consumer caution was most apparent when spending on non-essential goods and services as more consumers increased spending on essentials, particularly utilities and transport. Consumers were also more conservative about their expectations for making a major purchase in the next 12 months.

Finally, new research also reveals consumers may think the housing market downturn will extend into next year, as more Australians said it will be a good time to buy a property to live in or renovate over the next year, but a bad time to sell their home or investment property or to take out a property investment loan.

For further information, please download the NAB Consumer Anxiety Report Q1 2019