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Australian consumer confidence rebounded in August

14 Aug 2019 10:44 AM

Australian consumer confidence rebounded from a two-year low in August as people became more optimistic about the economy and the housing market.

A survey showed Wednesday that the Melbourne Institute and Westpac Bank index of consumer confidence rose by 3.6% in August, reversing a surprise 4.1% decline in July.

The index fell by 3.5% from a year earlier, and at 100.00 indicated that there are now as many optimists as pessimists.

The survey of 1,200 people will be a relief for the Reserve Bank of Australia (RBA), which cut interest rates in June and July in part to support consumer demand.

The index of economic conditions for the survey over the next 12 months jumped by 9.6%, while expectations for the next five years rose by 4.5%.

Participants were less optimistic in their own circumstances. The household financials gauge rose 0.9% from a year ago, while expectations for the next 12 months rose 0.7%.

In a promising signal for retail sales, the gauge of whether a good time to buy a large household piece rose by 2.8%, the highest level in more than a year. Sydney and Melbourne led the recovery after two years of weakness.

House prices have stabilized in the two cities in the past two months as auction demand has improved significantly. The House Price Survey forecast rose 5.1% in August, up 40% since May.

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