Growth, inflation and labour market all easing
Consumer anxiety fell in the June quarter despite very weak levels of economic and employment activity.
Consumer anxiety is falling in Australia in response to shifts in coronavirus concerns as confidence grows in Government responses to the virus and some COVID-19 restrictions are relaxed. Anxiety fell in the June quarter despite very weak levels of economic and employment activity. However, spending behaviours are becoming more conservative with an increase in the number of consumers (on balance) cutting back their spending relative to the previous quarter. Spending expectations for private school fees and private health insurance over the next 12 months have also been significantly scaled back. Savings intentions are also shifting and future income expectations declining.
Consumers are facing both an economic shock and a behavioural one. While many of the more sensationalist predictions about long-term changes to our spending behaviours are likely to be inaccurate, we will see adaptations and modifications to daily life, some of which have implications for how businesses will need to engage with consumers going forward.
For further information, please read the NAB Consumer Anxiety Survey (Q2 2020).
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