CANBERRA, AAP – Confidence among Australians barely changed in the past week as the potential benefits from a further drop in the unemployment rate were offset set by concern over the COVID-19 vaccine rollout.
The weekly ANZ-Roy Morgan consumer confidence index eased just 0.1 per cent after a lofty 5.9 per cent rise in the previous week, remaining above its long-run average.
Compared to a year ago when the economy was entering the depths of recession, confidence was 35.4 per cent higher.
ANZ head of Australian economics David Plank was surprised the drop in the unemployment rate to 5.6 per cent in March labour force data reported last week didn’t have more of a positive impact on confidence.
“Perhaps the good news on employment offset any fallout from the vaccine disappointment,” Mr Plank said.
A revamped vaccination rollout plan is expected to be released on Thursday when the national cabinet meets for a second time this week after the previous strategy was thrown into disarray by restrictions being put on the AstraZeneca treatment.
The AstraZeneca vaccine is now only recommended for people over 50 after cases of blood-clotting, both overseas and in Australia, in younger people, who have to wait for their Pfizer jabs later in the year.
Consumer confidence is a key pointer to future household spending.
Preliminary retail trade figures for March are due on Wednesday, which are expected to show spending grew by a solid 1.0 per cent in the month, rebounding from the 0.8 per cent decline in February.
This expected bounce in spending comes after the snap COVID-19 lockdowns in Victoria and Western Australia weighed on the February result.
Meanwhile, the minutes of the Reserve Bank’s April 6 monthly board meeting due later on Tuesday are unlikely to throw up anything new, but it won’t stop economists scouring them for any shifting risks to the outlook.
That meeting left the cash rate, and the rates on the central bank’s toolkit of policies, unchanged at a record low 0.1 per cent.
RBA governor Philip Lowe reiterated at the time the cash rate would not be hiked until inflation was comfortably within the two to three per cent target band, an event unlikely to occur until 2024 at the earliest.
“Despite Australia’s stunning economic recovery, we are still a long way off meeting the conditions necessary for the RBA to increase the cash rate,” St George economist Matthew Bunny said.
While the unemployment rate did drop to 5.6 per cent from 5.8 per cent, it is still a long way off from the low fours the central bank is aiming for, and a level not seen since 2008.
Even so, in February the RBA did forecast the jobless rate being 6.5 per cent at the end of June.