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These indicators provide an early read on behaviour across the economy. They suggest that the adjustment to higher fuel prices, increased uncertainty and tighter financial conditions is already underway, even if it has not yet appeared in the official data.
Consumers have reacted quickly
The most immediate shift has been in consumer sentiment. The ANZ–Roy Morgan Consumer Confidence Index fell sharply through March to 63.1, the lowest level on record. The decline has been rapid, with confidence falling by 17 points in just four weeks.
This has been accompanied by a sharp increase in inflation expectations, which have risen to around 6.9 per cent. This reflects the speed at which higher fuel prices and broader cost pressures are feeding into household expectations.
While sentiment does not always translate directly into spending, it is a strong leading indicator. When households feel uncertain, they tend to delay large purchases and become more cautious in their day-to-day spending decisions.
Early signs of softer housing demand
High-frequency housing data is also showing early signs of a shift in behaviour. Ray White open for inspection data indicates that buyer engagement has already eased.
Across Australia, the number of attendees at inspections is down around 1.1 per cent compared to a year ago. In Sydney and Melbourne, attendance is lower again at around 1.9 attendees per property.
This does not indicate a collapse in demand, but it does suggest that buyers are becoming more cautious. Fewer people are actively inspecting properties, which is often an early sign that momentum in the housing market is slowing.
Spending and business sentiment were already starting to soften before the conflict
Real-time spending and business sentiment data is still largely available only up to February, before the Middle East conflict escalated. However, these indicators were already pointing to a loss of momentum in parts of the economy.
Data from National Australia Bank shows that consumer spending grew by 0.4 per cent in February, but the composition of spending is more telling. Travel spending declined for a third consecutive month, indicating that discretionary demand was already weakening. NAB also noted that the February data likely did not yet fully reflect the February rate hike or the impact of the conflict, suggesting conditions may have deteriorated further since.
More timely transaction data from Commonwealth Bank also points to softer momentum heading into the conflict. Its Household Spending Insights index fell 0.5 per cent in February, the first monthly decline since September 2024, with annual growth slowing to 4.9 per cent, the weakest pace since August 2025. Discretionary spending was flat over the month, reinforcing the view that households were beginning to pull back even before the latest shock.
Business surveys were also starting to reflect a shift in sentiment. The National Australia Bank Business Survey for February (released in March) showed that business confidence had turned negative, falling to -1, the first negative reading in around a year. More recent quarterly survey data released in late March shows confidence has weakened further, even as current business conditions remain relatively stable.
Taken together, these indicators suggest that parts of the economy were already softening before the conflict intensified. The risk now is that this loss of momentum accelerates as higher fuel prices, rising costs and increased uncertainty flow through to household spending and business activity.
Labour market signals are mixed rather than clearly easing
Leading indicators of the labour market were still sending mixed signals heading into the conflict. Data from ANZ shows job advertisements rose through January and February 2026, including a 3.2 per cent rise in February, taking the series to its highest level since October 2024.
However, data from SEEK for February 2026 points to softer conditions, with job ads down 0.5 per cent over the month and applications per job ad remaining elevated, though easing from their mid-2025 peak. Taken together, this suggests the labour market remained firm before the conflict, but conditions were no longer tightening in a uniform way.
Markets are telling a different story
Financial markets, however, are responding differently. The S&P/ASX 200 has been volatile through March, closing at 8,525.7 on 26 March, down around 7 per cent over the month, but still approximately 7 per cent higher than a year ago.
Equity markets have also seen sharp rebound days, particularly when oil prices eased or geopolitical tensions appeared to stabilise. This suggests that investors are still looking through the near-term shock and expecting conditions to settle more quickly than households and businesses currently do.
A divergence is emerging
Taken together, high-frequency data is pointing to a divergence in how different parts of the economy are responding.
Households are reacting quickly, with confidence collapsing and early signs of reduced engagement in housing and discretionary spending. Businesses are becoming more cautious, with confidence weakening even as current conditions remain stable. Labour market indicators are showing mixed signals rather than clear deterioration.
In contrast, financial markets are more resilient and appear to be pricing a more temporary disruption.
This divergence is important. It suggests that while the official data may continue to show stability in the near term, underlying behaviour across the economy has already shifted.
