[SYDNEY] A measure of Australian consumer sentiment jumped to a six-month high in November as people became markedly more optimistic on the economic outlook, another sign that further cuts in interest rates might not be needed.
The survey of 1,200 people by the Melbourne Institute and Westpac Bank showed its index of consumer sentiment rose a seasonally adjusted 3.9 per cent in November.
The index has been volatile recently, with steep increases in August and October sandwiching a sharp fall in September.
The index reading of 101.7 was 5.3 per cent higher than in November last year and showed optimists finally outnumbering pessimists. "This is a cracking result," said Westpac chief economist, Bill Evans. "Apart from the brief surge we saw following last May's Budget this is the highest print for the Index since January 2014." The Reserve Bank of Australia (RBA) cited improving indicators of business and consumer confidence as one reason it skipped a chance to cut interest rates this month.
The improvement came despite news that major Australian banks were raising their mortgage rates in an attempt to claw back higher regulatory costs.
Mr Evans said the result could reflect confidence in the leadership of Prime Minister Malcolm Turnbull, who ousted his predecessor Tony Abbott in a party vote in September.
Respondents were clearly more upbeat on the economic outlook. The survey's measure of confidence in the economy over the next 5 years surged 24.2 per cent to the highest since September 2013.
The measure of economic conditions for the next 12 months also climbed 5.8 per cent, on top of a steep gain in October.
In a promising omen for retailers, the index of whether it was a good time to buy a major household item climbed 4.8 per cent in November. The survey also showed the most positive mix of Christmas spending plans since 2009.
Yet the survey's measure of family finances compared to a year ago dipped 2.2 per cent, while the outlook for the next 12 months dropped 9.1 per cent.