Australia: Consumer confidence continues to improve in August

The Westpac-Melbourne Institute Survey of Consumer Sentiment climbed from the 94.9 points tallied in July to 98.5 points in August. Despite August’s increase, the indicator still rests slightly below the 100-point threshold that separates optimistic from pessimistic territory.

According to the Institute, August’s print is encouraging. The index is now only 1.2% below its level prior to the government releasing its tough Federal Budget on 13 May. This rebound in confidence appears to be driven by political factors, largely the recent repeal of the carbon tax and increasing opposition in the Senate to some of the Budget’s more unpopular measures. Despite the recent gains, consumer confidence still remains around 10.8% below its post-election high.

FocusEconomics Consensus Forecast panelists see private consumption growing 2.6% in 2014, which is unchanged from last month’s forecast. In 2015, panelists see private consumption expanding 2.8%.