Relief for retailers as consumer confidence jumps
The Westpac-Melbourne Institute Index of Consumer Sentiment increased by 9.1% in August from 79.0 in July to 86.2 in August – the biggest jump in the last five years.
The data showed a recovery from a sixteen year low and the improvement has been put down to a softening of fuel prices.
The bounce in consumer confidence will hearten Australia’s retailers, CEO of the Australian National Retailers Association Margy Osmond said in response to the findings.
“It’s clear that the drop in petrol prices, tax cuts and signals from the Reserve Bank that it may cut interest rates, has restored some consumer confidence,” Mrs Osmond said. “The RBA should still follow through with it’s expected decision to drop interest rate though. Consumer confidence is still at it’s lowest level since 1993.”
Higher than expected wage growth was also reported today, and the RBA still appears set to cut interest rates as early as next month prompting the likelihood of improving consumer confidence in the coming months.