Australia Consumer Confidence August 2016


Australia: Consumer sentiment rises in August

August 10, 2016

The Westpac-Melbourne Institute Survey of Consumer Sentiment increased 2.0% in August as the index rose from July’s 99.1 to 101.0. The increase drove the index to cross the 100 mark and the number of optimists outnumbers pessimists once again.

The institute noted that the Central Bank’s early August interest rate cut had a far lesser impact on consumer confidence than the previous cut. When the Reserve Bank of Australia last cut its interest rate in May, consumer confidence jumped 8.5%. According to the institute, the difference lies primarily in the surprise effect of the May rate cut, while the Bank’s most recent cut had generally been expected. Moreover, banks did not pass the full cut on to mortgage borrowers this time. The political instability following the recent federal elections also weighed on consumer confidence. Nevertheless, the institute concluded that, “overall the lift in the Index is still consistent with an improved outlook for the Australian economy.”

FocusEconomics Consensus Forecast panelists see private consumption growing 2.8% in 2016, which is unchanged from last month’s forecast. In 2017, panelists also see private consumption expanding 2.6%.

Author:, Economist

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Australia Consumer Confidence Chart

Australia Consumer Confidence August 2016 0

Note: Index of consumer sentiment; 100-point threshold indicates equal number of positive and negative responses.
Source: Westpac-Melbourne Institute Survey of Consumer Sentiment.

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