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Consumer confidence slumps

Staff Reporter 4 minute read

Staff Reporter

The recent spate of positive economic data was not enough to keep confidence high, with consumer sentiment taking a hit in August.

According to the Westpac Melbourne Institute Index of Consumer Sentiment, confidence fell 5 per cent throughout August.

Westpac's chief economist Bill Evans said the drop came a s a surprise, with the Index reverting back to its July level.

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“While we were mindful of the high starting point for the Index we expected that the news over the month had been sufficiently positive to ensure a modest further increase,” Mr Evans said.

“Consider the positive news: the Reserve Bank kept interest rates on hold for a fourth consecutive month; there was a sharp improvement in the labour market with the unemployment rate falling to 5.1 per cent and 53,000 new full time jobs being reported; both the equity market and the Australian dollar rallied strongly in the two weeks leading into the survey; and, finally, we saw a resolution to political uncertainties with a minority government being formed.

Mr Evans said last month’s reading must have overstated confidence. As such, the September level of the Index is probably a more reasonable indication of the level of consumer confidence.

Consumer confidence slumps
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