Australia consumer confidence rebounds, upbeat on jobs

A measure of Australian consumer sentiment rebounded in October as people became more optimistic about the near-term economic outlook while confidence on the labour market was its strongest in almost four years. 

PHOTO: AFP

OCT 14, 20157:50 AM

[ SYDNEY] A measure of Australian consumer sentiment rebounded in October as people became more optimistic about the near-term economic outlook while confidence on the labour market was its strongest in almost four years.

The survey of 1,200 people by the Melbourne Institute and Westpac Bank showed its index of consumer sentiment rose a seasonally adjusted 4.2 per cent in October.

The index has been volatile recently, jumping 7.8 per cent in August only to slide 5.6 per cent the month after.

The index reading of 97.8 was 3.2 per cent higher than in October last year and showed pessimists still just outnumbered optimists.

Perhaps the most telling improvement came in the survey's measures on job prospects, which made its best showing since Nov 2011. "There has been a very significant and unexpected boost to respondents' assessment of the state of the labour market which looks to be an even more significant result than the increase in the overall Index," said Westpac chief economist, Bill Evans.

That gelled with a separate survey of businesses out on Tuesday which showed a marked rise in hiring intentions. Employment growth has generally surprised on the upside in recent months, though the jobless rate has been stuck around decade-highs of 6.2 per cent.

The improvement in sentiment in part could be due to the ouster of deeply unpopular Prime Minister Tony Abbott in a party coup and his replacement by Malcolm Turnbull.

However, the breakdown of respondents to the survey showed confidence among supporters of the ruling Liberal National Party actually fell in October.

The greatest gains came in the measure of economic conditions for the next 12 months which surged 20 per cent, more than reversing a sharp decline in September.

The measure of family finances compared to a year ago edged up 1.3 per cent, while the outlook for the next 12 months rose 3.5 per cent.

The only decline came in the outlook for the economy over the next 5 years which slipped 7.9 per cent.

In a promising omen for retailers, the index of whether it was a good time to buy a major household item climbed 6.3 percent in the month.

REUTERS