Westpac Consumer Confidence Index (s.a.) for August
- +7.8% m/m to 99.5
A much better reading than last month .. but still below 100 (the crossover from net pessimism to optimism, or from optimism to pessimism, depending on direction ... but you know what I mean). Mind you its been under 100 for 16 of the past 18 months ... so no surprise in that.
But, says WPAC (Bill Evans, Chief Economist):
- This is a very surprising result
- Movements of the Index of this magnitude are unusual and generally associated with highly significant events such as interest rate moves or Commonwealth Budgets
- There is no comparable event they may have triggered this response although the solution may lie with international issues and housing
- Last month we conjectured that the main reason behind the 3.3% fall in the Index related to concerns around global issues associated with Greece and the Chinese equity market.
- It seems that with the tensions in Greece and the Chinese equity market no longer dominating the media consumers are feeling more relaxed
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On the RBA, Evans says (bolding mine):
- The Reserve Bank Board next meets on September 1. There is very little chance that the Board will choose to move rates.
- Westpac expects that rates will remain on hold over the course of the remainder of this year and in 2016.
- It is notable that the Reserve Bank's forecasts in its recent Statement on Monetary Policy include a 3% growth forecast in 2016 lifting to a "heady" 3.75% in 2017.
- We are much more circumspect about the growth outlook in 2017. If, however, it became clear through the course of 2016 that the 3.75% growth outlook was likely to be achieved, and even exceeded, then rate increases would quickly move onto the radar screen
