Positive view toward economy.
Roy Morgan Australian consumer confidence bounced 3.4% to 115.8 this week after falling nearly 4% over the previous four weeks. Good news about the Australian labour market and the business sector during the week is likely to have lifted sentiment, while a bounce in equity markets is also likely to have boosted confidence.
The increase in confidence was largely driven by a bounce in consumers’ views towards the economic outlook. Views towards the ‘economy in the next 12 months’ bounced by a sharp 7.5%, and views towards the ‘economy in the next five years’ also rose strongly, up 5.2%.
The sub-index on whether ‘now is a good time to buy a major household item’ rose a solid 3.7%.
ANZ head of Australian economics Felicity Emmett commented, “The turnaround in consumer confidence takes sentiment back above its long run average. Last week’s strong labour market report showing a fall in the unemployment rate to 5.7% is likely to have been a key factor in the rebound. The jobless rate is now at the lowest level in over two years, and we anticipate conditions will remain solid in the near term.”
“While good news on the labour market and business conditions appears to have boosted confidence recently, the key is how confidence translates into spending. Household spending remains a risk to the outlook, and as such, confidence will be key to watch in the lead up to the Commonwealth Budget and what looks likely to be a July 2 double dissolution election,” she said.