Australian Consumers Sentiment Jumps in October

By James Glynn Features Dow Jones Newswires

Australian consumers were feeling peppier in October, with optimists outnumbering pessimists for the first time since last November, according to a monthly survey by Westpac.

Continue Reading Below

The Westpac-Melbourne Institute Index of Consumer Sentiment rose 3.6% to 101.4 in October from 97.9 in September.

"This is the first time since November last year that optimists have outnumbered pessimists and represents the highest level of the Index since October last year," said Westpac's chief economist, Bill Evans.

"Consistent reports of an improving global economy may have been a factor behind this lift in confidence. It is also likely that concerns about rising interest rates associated with overheated housing markets have eased," he added.

The upbeat data come despite a report last week showing retail sales slumped hard in August, fanning concerns that high debt and a lack of wages growth was stifling spending.

Mr. Evans said strong improvement in the job market this year, which has been led by a surge in full-time employment growth, is lifting confidence.

Continue Reading Below

The rise in confidence was particularly strong for trade workers, up 22% in the month, suggesting the continued strength in residential building as a positive factor, Mr. Evans added.

A survey by National Australia Bank Tuesday showed business confidence at it highest levels in a decade.

Still, there are concerns about the Australian economy, which grew by less than 2.0% in the last year.

The Reserve Bank of Australia expects GDP growth in 2018 of around 3.0%, but some economists warn that constraints on consumer spending, such as flat wages growth, might yet stall the economy.

Write to James Glynn at james.glynn@wsj.com

(END) Dow Jones Newswires

October 10, 2017 19:45 ET (23:45 GMT)