Powered by MOMENTUM MEDIA
Powered by MOMENTUM MEDIA
subscribe to our newsletter
Surprise surge in consumer confidence

Surprise surge in consumer confidence

Consumer confidence surged by 7.9 per cent in August, much to the surprise of economists.

The Westpac – Melbourne Institute Consumer Sentiment Index rose by 7.8 per cent in August from 92.2 in July to 99.5.

“This is a very surprising result. Movements of the index of this magnitude are unusual and generally associated with highly significant events such as interest rate moves or Commonwealth budgets,” Westpac’s chief economist Bill Evans said.

Advertisement
Advertisement

“There is no comparable event they may have triggered this response although the solution may lie with international issues and housing.”

Last month’s 3.3 per cent drop in consumer confidence was largely believed to be reflective of concerns around global issues associated with Greece and the Chinese equity market.

That fall followed a decrease in June of 7.1 per cent (also influenced by concerns around Europe in particular) from the big increase in May (8.0 per cent jump), which was most likely associated with the Reserve Bank’s rate cut in early May and a positive response to the Commonwealth budget, Mr Evans said.

“It seems that with the tensions in Greece and the Chinese equity market no longer dominating the media consumers are feeling more relaxed.”

However, Mr Evans believes ongoing positive news around house prices may also have buoyed confidence.

“Certainly there was a much larger lift in the confidence levels of those respondents who wholly own a property (up 6.2 per cent) or who hold a mortgage (up 11.0 per cent) than those who are out of the housing market (up 4.3 per cent),” he said.

Westpac expects the RBA to leave rates on hold over the course of the remainder of this year and in 2016.

Surprise surge in consumer confidence
mortgagebusiness

 

Latest News

Regulators could move to set caps on loan volumes for borrowers with high debt-to-income ratios if the housing market recovery continues to ...

The federal Treasurer has welcomed the final budget outcome for the 2019 financial year, which shows that the deficit now equates to zero pe...

The Federal Reserve has slashed rates for the second consecutive month, “reinforcing” the necessity of further cuts to the cash rate in ...

FROM THE WEB
podcast

LATEST PODCAST: New lending launches

Do you think the mortgage market will see more consolidation this year?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.