Australia: Consumers more optimistic in November
November 15, 2013
The Westpac-Melbourne Institute Survey of Consumer Sentiment increased to 110.3 points in November, which followed the 108.3 points tallied in October. After October's drop, the indicator returned to September's level, which was the highest reading in over two years. The indicator has remained above the 100-point threshold separating optimistic from pessimistic territory for the past six months.
According to the Institute, the improvement in consumer sentiment followed the Reserve Bank's decision at its 5 November meeting to keep the reference rate on hold at a historical low of 2.50%. Moreover, housing prices increased in September, driving up homeowners' confidence regarding the economic outlook for next year. The increase more than offset the drop in confidence of those who rent their homes. The Institute also mentioned that consumers' confidence in the labor market is dragging. Although the unemployment rate was stable at 5.7% in October, this was only because, "workers have been voluntarily leaving the work force altogether, likely in part because they feel discouraged in their job search." This reality is likely to continue to drive employment expectations down in the coming months.
FocusEconomics Consensus Forecast panelists see private consumption growing 2.0% in 2013, which is down 0.1 percentage points from last month's forecast. In 2014, panelists see private consumption expanding 2.6%, which is also down 0.1 percentage points from last month's projection.