Westpac’s detailed analysis of its Consumer Sentiment Index, the Redbook, is out.
The good news for the domestic economy and retailers around the nation is that the post-budget slump appears to be behind us, in both sentiment and spending.
Westpac had previously warned not to be too pessimistic about the fall in sentiment based on past experience and notes that after the strong bounce in consumer sentiment this month:
the ‘CSI±, our modified sentiment indicator that we favour as a guide to actual spending, posted a solid 3.7% gain in Aug and is now pointing to positive, albeit sluggish, growth in per capita spending of around 0-½%yr (1¾-2¼%yr once population growth is factored in)’.
Crucially Westpac says that the latest sentiment reading “reverses nearly all of the Budget-related sentiment decline. Meanwhile the latest data on retail sales and from private business surveys provides broad confirmation of our view”.
It may not be a boom, but regardless, this is still good economic news.
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