CommSec today:
The latest consumer sentiment reading was certainly encouraging. Consumer confidence recorded its biggest percentage increase in five months and the improvement could not have come at a better time. The boost to confidence levels is really a result of a raft of positive influences on the household budget. Not only were consumers starting to see the full impact of the multiple rate cuts, but federal government handouts kicked in and even fuel prices were holding at some of the cheapest levels in around 18 months – in effect everything that could go right for consumers did. Certainly the household budget is looking much healthier than just a few months ago. In fact had confidence tracked lower in July it would have been far more worrying.
All five components across the sub categories were higher with the largest increase recorded in “expectations of economic conditions over the next 12 months” which rose by 5.8 per cent in July. And even the “the estimate of family finance compared with a year ago” rose by 28 per cent in the past two months – a result that was clearly due to the rate cuts and federal budget handouts. In fact the result highlights just how important the rate cuts have been in ensuring consumers are less pessimistic.
