Australians are becoming anxious about the demise of the JobKeeper wage subsidy at the end of the month, despite assurances from Treasurer Josh Frydenberg the impact will likely be short-lived.
The weekly ANZ-Roy Morgan consumer confidence index dropped 0.9 per cent, more than halving the gain of the previous week.
The fall in the index - a pointer to future household spending - came despite last week's government announcement of a $1.2 billion tourism support package.
"It is possible the drop in confidence could be linked to consumers being apprehensive about a future without the JobKeeper program," ANZ head of Australian economics David Plank said.
Mr Frydenberg concedes there could be a bumpy few months ahead as JobKeeper ends.
"Of course there are some on JobKeeper who are going to struggle into other jobs, but overall there is going to be a steady momentum in the right direction over time," he told ABC radio.
Shadow treasurer Jim Chalmers said any job losses associated with the end of JobKeeper are in the hands of the treasurer and Prime Minister Scott Morrison.
"If you cut JobKeeper, you cut jobs. It's that simple," Dr Chalmers told reporters in Canberra.
"Hundreds of thousands of Australian workers and small businesses face a very uncertain time when JobKeeper is cut in the next two weeks."
The Reserve Bank, in the minutes of its March 2 board meeting released on Tuesday, does not expect the end of JobKeeper will result in a sustained increase in the unemployment rate.
"The ongoing recovery in labour market conditions could be broadly sufficient to offset the job losses arising after the end of the JobKeeper program," the minutes said.
Westpac senior economist Andrew Hanlan said while there might be a period where the jobless rate stabilises, he expects it will be six per cent by the end of year and will "moderate further".
The unemployment rate is expected to ease to 6.3 per cent from 6.4 per cent when the February labour force report is released on Thursday.
In the interim, payroll jobs rose 0.4 per cent across the fortnight to February 27, the Australian Bureau of Statistics said.
However, hospitality continued to be the most affected by jobs losses stemming from the pandemic, still down 11.6 per cent since mid-March last year compared with just a 0.2 per cent decline for other industries.
A separate report shows manufacturing has turned a corner and is leading the recovery in 2021.
The composite index of Australian Chamber of Commerce and Industry-Westpac industrial trends survey rose to 60.4 in the March quarter from 48.8 three months earlier.
This is a further extension of the recovery from the plunge to 24.0 in the June quarter during the depths of the recession.
"Businesses are very positive that this strong rebound can continue in the June quarter," Mr Hanlan told reporters in Canberra.
He said new orders are flooding in, notably from the construction industry, which is picking up from a prolonged downturn aided by low interest rates and HomeBuilder scheme.
The ABS also released its city property price index for the December quarter, showing a three per cent increase, the strongest growth since December 2019.
All capital cities recorded a rise in property prices, led by Sydney (3.0 per cent) and Melbourne (3.4 per cent).
"The rise in property prices is consistent with a range of housing market indicators," the bureau's head of price statistics Michelle Marquardt said.
"New lending commitments to households, auction clearance rates and days on market all improved during the December quarter."