-Diana Mousina, an economist at Commonwealth Bank of Australia
Consumer confidence in Australia rose in February to the highest level in a year after the Reserve Bank of Australia cut its official cash rate to a new record low of 2.25% last week, providing home owners with another boost in spending power. The Westpac-Melbourne Institute Consumer Sentiment Index jumped 8% to 100.7 in February, compared with 93.7 in the previous month. That is the first time since February 2014 that the gauge has climbed above the 100-level, pointing that optimists outnumber pessimists. Alongside the rate cut, 21% decline in petrol prices and a rising share market also appeared to brighten consumers' mood. Another positive piece of news came from the nation's real estate market, where the total number of home loans rose a seasonally adjusted 2.7% on month in December, according to the Australia Bureau of Statistics. That beat expectations for a rise of 2.0% following the 0.7% drop in November.
Meanwhile, Australia's unemployment rate jumped to the highest level in more than 12 years, justifying the RBA decision to cut rates this month and signal more easing to come. The jobless rate rose to 6.4% in January up from 6.1% in the preceding month. Australia's economy lost 28,100 full-time jobs and created 15,900 part-time jobs last month, lowering net job growth by 12,200 in January after 37,400 were added in December.
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