Public’s outlook a little sunnier
Email Kathleen or Alister kathleen.skene@news.com.au alister.thomson@news.com.au FOR the first time in almost a year, most consumers feel optimistic about jobs, household finances and economic conditions.
The latest Westpac and Melbourne Institute index of consumer sentiment has climbed this month to its highest level since October last year, with an improving global economy helping to lift people’s spirits.
Westpac chief economist Bill Evans said the turnaround was driven by easing concerns about rising interest rates as well as improvements to the labour market, particularly for builders thanks to ongoing residential projects.
Consumers are also feeling optimistic about employment, with job security fears at their lowest since mid-2011.
Commonwealth Bank economist Kristina Clifton said this trend was likely to continue as moderate jobs growth was expected in coming months.
The better mood could also be fuelled by a lift in minimum wages, she believed, as well as the shock of the July electricity and gas price rises easing, because most customers had in fact paid their quarterly bills for now.
“However, there are some headwinds being faced by consumers, including high household debt levels,” Ms Clifton said.
Family finances remained a sore spot, with assessments of their own finances down compared with a year ago despite increasing slightly from last month.
Mr Evans said that consumers were more positive about making major household purchases, but that subindex was well below the long term average.
“The sluggish spending evident through most of 2017 is likely to extend into year-end,” he said.
Figures released by the Australian Bureau of Statistics last week showed that retailers had suffered their sharpest monthly fall in revenue for four years, with economists saying consumers tightened their belts due to a combination of higher energy bills, weak wages growth, rising debt and cooling house prices.
Despite house price expectations softening in October, the index shows consumers remain downbeat about the market, with the time-to-buy indicator dipping since last month.
The Australian dollar ticked up to US78.08¢ after the consumer confidence figures were released yesterday morning.