- Matthew Hassan, senior economist at Westpac
A measure of Australian consumer mood bounced in June, recovering from two months of sharp fall, an encouraging sign as the resource-rich economy is struggling boost growth amid anticipated slowdown in mining sector, which will trigger a rise in unemployment. The Westpac-Melbourne Institute index of consumer sentiment jumped 4.7% to 102.2 this month from May, when it fell 7.0%. Reading above 100 threshold level indicates that optimists outnumbered pessimists. At the same time, the sub-index, which tracks assessments of family finances a year ago, rocketed 8.5%, more than reversing the 8% drop in the prior month. A gauge of expectations for family finances over the next year rose 5.3%.
Australian consumers are seeing the opportunity to enter the housing market, as the measure of conditions to buy a major household item, gained 3.7% in June. Despite the improvement in consumers' mood, the outlook for the economy is likely to discourage many buyers, while risks for the recovery are high, especially with concerns over job prospects as the decade-long mining boom fades. All fears are underscored by the weak first quarter national accounts data, a sharp drop in the share market and the Aussie.
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