Australia’s strong labour market and improving business conditions have helped lift consumer confidence.
The ANZ-Roy Morgan consumer confidence index rose 3.4 per cent last week, after falling nearly 4.0 per cent over the previous four weeks.
ANZ’s head of Australian economics Felicity Emmett said last week’s official figures showing the unemployment rate fell to 5.7 per cent in March likely sparked the rebound.
“The jobless rate is now at the lowest level in over two years, and we anticipate conditions will remain solid in the near term,” she said in a statement.
“The strength in business conditions, which are now back at their highest levels since the GFC (global financial crisis), points to a solid labour market in the near term.”
Consumers’ views of the economy over the next 12 months surged 7.5 per cent, while their outlook for the economy over the next five years also bounced, up 5.2 per cent.
Meanwhile, respondents’ views of their own finances were quite mixed.
Last week, they were 3.9 per cent more optimistic about their current financial situation, compared to one year ago.
But they were less optimistic towards about their finances over the next 12 months, with that measure down 1.9 per cent.
On the other hand, the subindex on whether “now is a good time to buy a major household item” jumped 3.7 per cent.
Ms Emmett said that while last week’s figures were solid, the key for the economy would be whether confidence translated into spending.
“Household spending remains a key risk to the outlook and, as such, confidence will be key to watch in the leadup to the Commonwealth Budget and what looks likely to be a July 2 double dissolution election,” she said.