The RBA’s decision to keep rates on hold has helped buoy consumer confidence. The Westpac–Melbourne Institute Consumer Sentiment Index rose by 11.1 per cent in July – the strongest monthly jump since June 2009.
According to Westpac’s chief economist Bill Evans, Australians are more upbeat about the future of the economy, thanks to the latest pause in rates and the recent drop in unemployment.
In addition, Australians also have an upbeat view on spending, with consumer views on “whether now is a good time to buy major household items” rising 7.3 per cent – more than reversing the 5.6 per cent fall over the previous two months.
“The solid base for consumer sentiment is coming from an upbeat view on the economy. The component of the Index assessing the economic outlook for the next 12 months rose 10 per cent while the five year outlook surged 16.2 per cent – consumers remain upbeat on the economy with both components still well above their long run averages,” Mr Evans said