Westpac has reported an increase in consumer confidence, which the bank insists is more than just a result of the regular “holiday boost”.
The major reported a 2.4 per cent monthly improvement in consumer sentiment for January, but it is still down 9.7 per cent compared with 12 months ago.
However, chief economist Bill Evans said the small monthly increase indicates that sentiment has lifted over and above the rise normally seen in January.
“The recent hiatus in media coverage on Budget issues would have been a welcome respite for respondents,” he said.
“The December labour force report would also have clearly boosted confidence.
“The unemployment rate was reported to have fallen from 6.2 per cent in November to 6.1 per cent in December, with an impressive 37,500 jobs added on top of the 44,900 jobs added in November.”
Mr Evans said the sharp fall in petrol prices would have also been a positive for consumers.
“Local pump prices averaged just $1.10 per litre nationally during the January survey week – a six-year low, and down sharply on the $1.32 per litre recorded in December and the $1.46 per litre average throughout 2014.”
Mr Evans added that markets are giving little chance of a rate cut when the Reserve Bank board meets on February 3.