Australia's Nov consumer sentiment jumps to seven-year highs

[SYDNEY] A measure of Australian consumer sentiment climbed for a third straight month in November to a seven-year high as consumers became more optimistic about the country's economy with the coronavirus pandemic now under control.

The Westpac-Melbourne Institute index of consumer sentiment released on Wednesday added 2.5 per cent in November from October, when it had climbed 11.9 per cent.

The index is now 11 per cent above its level a year ago and at 107.7 implies optimists outnumbered pessimists.

"This is another strong result," said Westpac chief economist Bill Evans.

"The most important developments since last month have been the significant unwinding of restrictions across Victoria and the reopening of the Victoria-New South Wales border."

Confidence in Victoria, which eased coronavirus restrictions this month as a second-wave outbreak was contained, surged 9 per cent.

The survey was conducted over Nov 2-6 when the Reserve Bank of Australia (RBA) trimmed its cash rate to 0.1 per cent and expanded its government bond-buying programme.

The components of the index showed mixed results.

The sub-index measuring the outlook for the economy over the next 12 months jumped 8.4 per cent in November from October, while the outlook for the next five years ticked up slightly.

In a welcome sign for retailers heading into the critical Christmas shopping season, the measure of whether consumers felt it was a good time to buy a major household item rose 6.7 per cent.

However, consumers felt less confident about their finances.

The measure of family finances compared with a year earlier slipped 3.2 per cent and the outlook for the next 12 months was mostly flat.

Still, the sub-index measuring 'time to buy a dwelling' climbed 8 per cent.

Westpac Banking Corp and the Melbourne Institute surveyed 1,200 people from across the county.

REUTERS