New figures suggest Australians are thinking twice about opening their wallets after a disappointing employment report showing a further slump in full-time workers.
In the past week consumer confidence has fallen to its lowest level since May - a time when people were still working out whether the federal budget would hit their hip-pocket and worrying what an eight-week federal election campaign might bring.
The latest weekly ANZ-Roy Morgan consumer confidence index dropped 3.6 per cent amid a deterioration in views about future financial and economic conditions.
Consumer confidence is a pointer to future retail spending.
"We expect that last week's labour market report showing ongoing weakness in full-time employment likely weighed on sentiment," Felicity Emmett, ANZ head of Australian economics said.
Stock market falls over the past couple of weeks could also have dampened consumers' view of the outlook.
Official jobs figures last week showed the number of full-time workers tumbled by a hefty 53,000 in September, the largest monthly drop in five years.
It was only partly offset by a rise in part-time workers.
It leaves a record proportion of people looking for extra work - classified as underemployed.
It suggests wage growth will remain contained, keeping a lid on already subdued inflation.
The September quarter consumer price index is released on Wednesday.
Economists expect the CPI to have risen by 0.5 per cent over the quarter, which would see the annual rate creep up to just 1.1 per cent - remaining well below the Reserve Bank's two to three per cent inflation target band.
The more interest-rate-sensitive underlying measures of inflation, which iron out volatile price swings, are forecast to rise by 0.4 per cent on average, for an annual rate of 1.6 per cent.
Financial markets see little chance of another interest rate cut by the central bank based on these expectations, although a weaker result would raise the possibility of a reduction in the cash rate when the Reserve bank holds its monthly board meeting next Tuesday.
The cash rate already sits at a record low 1.5 per cent.
