Consumer confidence is wavering just a week out from the federal budget as wage growth badly lags soaring petrol prices.
The weekly ANZ-Roy Morgan measure of consumer confidence dropped nearly 5 per cent to its lowest in 18 months as fuel hovers above $2.20 a litre.
Sentiment sagged even after last week’s data that showed unemployment dropped to a 14-year low 4 per cent in February.
ANZ head of Australian economics David Plank noted bowser blues were also clouding Australians’ outlook for current and future economic conditions, both measures now down 10.3 per cent and 8.4 per cent over the past two weeks.
Mr Plank said inflation expectations, which climbed 6 per cent, likely meant people were nervous to spend.
“We noted last week that the weakness in consumer sentiment is at odds with the strength in employment and reflects pressure on household budgets as nominal wage growth lags the jump in inflation,” Mr Plank said on Tuesday.
“The weakness in consumer confidence presents a growing near-term risk to the outlook for household spending.”
The data comes just a week out from the federal bxjmtzywudget and is firmly at odds with the economic-savvy image the Coalition government is hoping to convey to voters.
The cost of petrol has leapt significantly in recent weeks, as sanctions against oil-rich Russia crimp global supply.
