The short, sharp impact of South Australia’s coronavirus lockdown was enough to sour the mood of the nation.
The ANZ-Roy Morgan consumer confidence index – a pointer to future household spending – fell two per cent in the past week.
It ends a record breaking run of 11 consecutive weekly gains that took it to its highest level since February..
“With South Australia reopening earlier than expected and restrictions in Victoria and New South Wales relaxed the impact on sentiment may be short-lived,” ANZ economist David Plank said.
The index remains above the 100-point level despite the latest setback, suggesting optimists continue to outweigh pessimists.
The data comes ahead of a lunchtime speech by Reserve Bank deputy governor Guy Debelle.
St George economists point out it was a speech by Dr Debelle in September that set minds racing with hints of changes to Reserve Bank policy.
Those changes eventually came in early November, with cuts to the cash rate and other key rates to a record low 0.1 per cent, and the introduction of an $100 billion bond buying program.
“We doubt Tuesday’s speech will be as seminal as the one given in September, but they always give insight into how the Reserve Bank sees the world and how the RBA can play its role in Australia’s economic recovery,” St George said in a note to clients.
Dr Debelle will deliver his address on “Monetary Policy in 2020” to an Australian Business Economists webinar.
It is the last planned speech for a Reserve Bank official before its final board meeting of the year on December 1.
The board will not convene again until February.
Central bank governor Philip Lowe told a conference last week the economy is on the road to recovery, although he conceded it will likely be a bumpy journey and a full recovery will take some time.
Next week’s national accounts are expected to show the economy grew in the September quarter after six months of contraction, notably the huge seven per cent drop in the June quarter.
Australia has not suffered three consecutive quarters of contraction since the early 1980s recession, when it endured four.
Quarterly construction and business investment figures this week may give a clue to the size of the recovery.