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.
About the author
About the author
Economy
CPI data another piece in RBA's interest rate decision puzzle, says REIA
The latest Consumer Price Index (CPI) data from the Australian Bureau of Statistics (ABS) shows that inflation rose 3.4% in the 12 months to February 2024, unchanged from the previous two months, ...Read more
Economy
Including passive job seekers in unemployment measure doesn't impact economic cycle view, study finds
New research from e61 Institute has found that while current unemployment measures may not capture all job seekers, broader definitions that include passive job searchers do not provide better ...Read more
Economy
Survey reveals heightened job security concerns among IT workers in 2024
A recent survey conducted by Authority Hacker has revealed that 89.66% of IT workers in the United States have increased concerns about job loss in 2024. Read more
Economy
Australian founders adapt to the challenging fundraising environment with optimism and strategic shifts
The landscape for start-up funding in Australia has been increasingly challenging, but this has not dampened the spirit of the country's entrepreneurs. Read more
Economy
Signs point to possible US economic 'soft landing' in ClearBridge analysis
The US economy may be steering towards a 'soft landing' despite mixed signals from the stock market, according to a recent analysis by ClearBridge Investments. Read more
Economy
Alternative fund managers predict capital raising surge in 2024
Alternative investment fund managers are predicting a sizable increase in capital raising efforts in 2024, according to a global study by Ocorian, a leading alternative investment fund administratorRead more
Economy
Understanding the economic indicators that affect your earnings
The landscape of personal finance is profoundly influenced by broader economic trends and indicators. Read more
Economy
Navigate market turbulence with expert advice: no crystal ball needed
In an era fraught with investment market uncertainties, from fluctuating interest rates to geopolitical strife, seasoned market experts are guiding investors through the mire, offering sage advice on ...Read more
Economy
CPI data another piece in RBA's interest rate decision puzzle, says REIA
The latest Consumer Price Index (CPI) data from the Australian Bureau of Statistics (ABS) shows that inflation rose 3.4% in the 12 months to February 2024, unchanged from the previous two months, ...Read more
Economy
Including passive job seekers in unemployment measure doesn't impact economic cycle view, study finds
New research from e61 Institute has found that while current unemployment measures may not capture all job seekers, broader definitions that include passive job searchers do not provide better ...Read more
Economy
Survey reveals heightened job security concerns among IT workers in 2024
A recent survey conducted by Authority Hacker has revealed that 89.66% of IT workers in the United States have increased concerns about job loss in 2024. Read more
Economy
Australian founders adapt to the challenging fundraising environment with optimism and strategic shifts
The landscape for start-up funding in Australia has been increasingly challenging, but this has not dampened the spirit of the country's entrepreneurs. Read more
Economy
Signs point to possible US economic 'soft landing' in ClearBridge analysis
The US economy may be steering towards a 'soft landing' despite mixed signals from the stock market, according to a recent analysis by ClearBridge Investments. Read more
Economy
Alternative fund managers predict capital raising surge in 2024
Alternative investment fund managers are predicting a sizable increase in capital raising efforts in 2024, according to a global study by Ocorian, a leading alternative investment fund administratorRead more
Economy
Understanding the economic indicators that affect your earnings
The landscape of personal finance is profoundly influenced by broader economic trends and indicators. Read more
Economy
Navigate market turbulence with expert advice: no crystal ball needed
In an era fraught with investment market uncertainties, from fluctuating interest rates to geopolitical strife, seasoned market experts are guiding investors through the mire, offering sage advice on ...Read more