Australia's overall Nov consumer sentiment index marginally positive

An index reading above 100 means optimists outnumber pessimists.

This is the first positive read since early 2022 and a seven-year high, excluding the COVID-19 pandemic period.

Expectations improve as domestic recovery firms and trade risks subside in the country.

The strong gain is despite a less confident outlook for interest rates and jobs.

‘Mortgage belt’ is a notable exception, with sentiment dipping across this sub-group.

Christmas spending plans in the country are less restrained than last year, Matthew Hassan, head of Australian macro-forecasting at Westpac, wrote on the company website.

However, the move draws a clearer line under what had been an extended period of consumer pessimism when disposable incomes were being hit hard by a combination of high inflation, high interest rates and rising tax payments, Hassan wrote.

Much of the November sentiment gain is coming from a markedly more confident assessment of prospects for the economy. The sub-indices for the economic outlook for the next 12 months and that for next five years both jumped sharply in the month—up by 16.6 per cent and 15.3 per cent respectively. Both these are now in solid positive territory, well above long-run averages.

There are clearer signs that a domestic recovery is gaining momentum in Australia, especially around consumer demand and housing markets. Meanwhile, external threats also appear to have eased with a de-escalation of US-China trade tensions and recent meetings between Australia and the United States resulting in a new deal on the supply of critical minerals and rare earths.

The real surprise, though, is how much these positives have outweighed renewed concerns about inflation and the outlook for interest rates, Hassan added.

ALCHEMPro News Desk (DS)