Australian consumer confidence soars to 2.5-yr high

Australian consumer sentiment surged in November for the second consecutive month, reaching a 2-1/2-year high. The mood on the economy and finances has turned optimistic, according to a survey released on Tuesday.

The Westpac-Melbourne Institute index of consumer sentiment increased by 5.3 per cent in November, following a 6.2 per cent jump in October. The index reading of 94.6 indicates that pessimists still outnumber optimists, but the margin is narrowing.

Consumers are feeling less financial strain, relieved about no more interest rate hikes, and gaining confidence in the economy, stated Westpac Senior Economist Matthew Hassan.

The Reserve Bank of Australia (RBA) maintained its interest rates at 4.35 per cent this month, with expectations of a future decrease next year.

It is important to note, however, that consumer sentiment experienced a temporary setback following the recent US presidential election. Nonetheless, the overall trend remains positive, with a significant rise in consumer confidence in various areas:

The measure of family finances compared to a year ago jumped 6.8 per cent, while the outlook for the next 12 months rose 4.4 per cent.

The index measuring the economic outlook for the next 12 months surged 8.7 per cent, and the outlook for the next five years climbed 6.5 per cent.

The “time to buy a major household item” index increased 3.2 per cent, suggesting a positive outlook for retailers, especially during the upcoming Christmas shopping season.

The time to buy a dwelling index jumped 11.3 per cent, indicating a renewed interest in the housing market.

Attribution: Reuters

Subediting: M. S. Salama