Australian Consumer Confidence Still Below Pre-Virus Level

Australian Consumer Confidence Still Below Pre-Virus Level
Cafes in Melbourne's Degraves street open for dine in customers on June 01, 2020 in Melbourne, Australia. (Darrian Traynor/Getty Images)
AAP
By AAP
9/28/2020
Updated:
9/29/2020

The containment of new COVID-19 infections in Victoria, which led to the easing of some restrictions, could further lift the mood of Australians more generally.

The weekly ANZ-Roy Morgan consumer confidence index—a pointer to future household spending—is due for release on Sept. 29.

The index has risen for three straight weeks to stand at its highest level since late June.

Still, at an index of 93.5 points it is still well below its monthly average since 1990 of 112.6 points, and under 100 points indicates pessimists outweigh optimists.

ANZ head of Australian economics David Plank also points out that confidence is still at a comparable level to that reached during the depths of 2008-2009 global financial crisis.

Last week’s 1.2 percent rise in confidence was in response to an unexpected drop in the jobless rate and a notable rise in sentiment among Victorians as infections rapidly subsided.

Since then there has been speculation that the Reserve Bank may ease monetary policy even further at its Oct. 6 board meeting, albeit modestly.

This would coincide with Treasurer Josh Frydenberg budget, which is set to be a big spending one to help the economy out of recession.

However, there are concerns what impact the reduction in the JobSeeker coronavirus supplement that came into effect on Sept. 25—as well as the winding back of the JobKeeper payment from Sept. 28—will have on future spending.

By Colin Brinsden