Invest
Labour market bounceback sees consumer confidence reach decade high
The end of JobKeeper and a botched vaccine rollout have not dented consumer sentiment, with strong labour market data leading to consumer confidence rising to levels not seen since the GFC recovery, according to a big four bank.
Labour market bounceback sees consumer confidence reach decade high
The end of JobKeeper and a botched vaccine rollout have not dented consumer sentiment, with strong labour market data leading to consumer confidence rising to levels not seen since the GFC recovery, according to a big four bank.
The latest Westpac-Melbourne Institute sentiment index showed that consumer sentiment has increased by 6.2 per cent to 118.8 points in April, with 100 points the difference between an optimistic and pessimistic outlook.
Westpac’s chief economist, Bill Evans, described the result as ‘extraordinary’, noting he expected consumer confidence to fall in line with recent events.
“The survey was conducted in the week following the unwinding of the JobKeeper program,” he said.
“Initial fears that this and associated job losses would undermine confidence have proven to be unfounded.”
“Secondly, there has been disappointing progress on the vaccine rollout locally. Compounding this was new advice against giving those aged under 50 the AstraZeneca vaccine due to risks of rare but serious side effects. Yet households appear to be resilient,” Mr Evans explained.
According to the chief economist, a strong labour market has been the catalyst for this positive consumer outlook.
“Job vacancies were reported to be 27 per cent above the pre-COVID level in February last year, while the February labour force update showed the unemployment rate had fallen from 6.3 to 5.8 per cent, with employment increasing by a stunning 89,000,” the chief economist explained.
He also pointed to ending lockdowns and the associated upswings of workers in the recreation and hospitality sectors, with workers in these sectors showing big sentiment gains of 23 and 14 per cent, respectively.
“This result is particularly pertinent given that the unwinding of JobKeeper was expected to disproportionately impact recreation and hospitality,” Mr Evans said.
Victoria led the way with consumer confidence gains, with the state continuing to benefit from increased freedoms post its latest ‘mini-lockdown’.
Rising house and strong auction clearance rates are also buoying consumer confidence; however, affordability issues are creating headwind issues.
“Housing affordability appears to be weighing on home buyer sentiment; big ticket item spending intentions are not nearly as buoyant as the overall index; and confidence in the jobs market appears to have plateaued,” Mr Evans concluded.
RELATED ARTICLES
About the author
About the author
Economy
GDP data prompts economist to predict faster RBA rate cuts
Australia's latest GDP growth data has come in significantly below expectations, prompting an economist to suggest the Reserve Bank may need to ease monetary policy more aggressively. Read more
Economy
Global markets face turbulent start amid tariff concerns, but outlook remains cautious
Global equity and bond markets have experienced a turbulent start to 2025, primarily due to concerns that a potential tariff-driven trade war could heighten inflation and recession risks. Read more
Economy
RBA may cut rates faster if GDP data disappoints, economists say
The Reserve Bank of Australia may cut interest rates more quickly if next week's GDP data disappoints, economists said following today's consumer price index data for May. Read more
Economy
RBA delivers widely expected rate cut as inflation optimism balances global uncertainty
The Reserve Bank of Australia has cut the cash rate by 25 basis points, delivering on widespread market expectations while signalling a clearer directional shift towards less restrictive monetary ...Read more
Economy
Economist warns strong jobs data may delay further RBA rate cuts
Strong employment growth in April has put expectations for multiple interest rate cuts at risk, though upcoming economic data may clarify the need for lower rates, according to State Street Global ...Read more
Economy
Australian inflation continues downward trend, nearing RBA target
The Australian Bureau of Statistics (ABS) has reported that the Consumer Price Index (CPI) rose 2.7 per cent in the year to August, down from 3.5 per cent in July and 3.8 per cent in June. Read more
Economy
UK markets poised for gains after election, global geopolitical risks remain
Chris Iggo, Chief Investment Officer at AXA Investment Managers, has provided an optimistic outlook for UK markets following the recent general election, while cautioning about ongoing global ...Read more
Economy
Co-ops and mutuals boost revenue to $43.2 billion despite economic challenges
Australia's top 100 co-operative and mutual businesses have posted a record performance in the 2023 financial year, growing total revenue by 16.1 percent to $43.2 billion. Read more
Economy
GDP data prompts economist to predict faster RBA rate cuts
Australia's latest GDP growth data has come in significantly below expectations, prompting an economist to suggest the Reserve Bank may need to ease monetary policy more aggressively. Read more
Economy
Global markets face turbulent start amid tariff concerns, but outlook remains cautious
Global equity and bond markets have experienced a turbulent start to 2025, primarily due to concerns that a potential tariff-driven trade war could heighten inflation and recession risks. Read more
Economy
RBA may cut rates faster if GDP data disappoints, economists say
The Reserve Bank of Australia may cut interest rates more quickly if next week's GDP data disappoints, economists said following today's consumer price index data for May. Read more
Economy
RBA delivers widely expected rate cut as inflation optimism balances global uncertainty
The Reserve Bank of Australia has cut the cash rate by 25 basis points, delivering on widespread market expectations while signalling a clearer directional shift towards less restrictive monetary ...Read more
Economy
Economist warns strong jobs data may delay further RBA rate cuts
Strong employment growth in April has put expectations for multiple interest rate cuts at risk, though upcoming economic data may clarify the need for lower rates, according to State Street Global ...Read more
Economy
Australian inflation continues downward trend, nearing RBA target
The Australian Bureau of Statistics (ABS) has reported that the Consumer Price Index (CPI) rose 2.7 per cent in the year to August, down from 3.5 per cent in July and 3.8 per cent in June. Read more
Economy
UK markets poised for gains after election, global geopolitical risks remain
Chris Iggo, Chief Investment Officer at AXA Investment Managers, has provided an optimistic outlook for UK markets following the recent general election, while cautioning about ongoing global ...Read more
Economy
Co-ops and mutuals boost revenue to $43.2 billion despite economic challenges
Australia's top 100 co-operative and mutual businesses have posted a record performance in the 2023 financial year, growing total revenue by 16.1 percent to $43.2 billion. Read more
