This morning the Westpac-MI consumer sentiment survey for December will be released, a closely watched report that reveals expectations for the economy, consumer spending, labour market conditions and house prices in the months ahead.
Here’s the state of play.
- The survey is based upon responses from 1,200 adults across Australia and is generally conducted the week prior to the results being released.
- A reading of 100 is deemed neutral, meaning the number of optimists and pessimists is equal. A figure above 100 indicates optimists outnumber pessimists while a figure below 100 suggests pessimists outnumber optimists.
- In November sentiment rose 3.9% to 101.7, taking the index to the highest level seen since May. It also signalled that optimists outnumbered pessimists, the first time in six months that has occurred.
- Three of the surveys five subindices improved, led by an enormous 24.2% increase in economic expectations looking five years ahead. Sentiment towards the economy in the year ahead rose 5.8%, slightly shading a 4.8% increase in whether now was a good time to buy a major household item.
- Offsetting those impressive numbers, sentiment towards family finances deteriorated sharply, particularly the gauge measuring expectations in the year ahead which plummeted 9.1%.
- Elsewhere unemployment expectations edged higher while sentiment towards the housing market remained soft. Both will be watched closely today given the recent divergence in labour market conditions to those of the housing market. The former is strengthening while the latter weakening.
- Interestingly, the bounce in the headline sentiment index was driven entirely by high income earners. Sentiment among those earning above $80,000 soared, masking weak readings for low and middle income earners.
- Given the separate ANZ-Roy Morgan weekly consumer confidence index bounced handsomely yesterday, it suggests that a similar outcome might arrive in the Westpac-MI survey today. While the former is weekly, not monthly like the latter, it’s likely that both were conducted around the same time period.
The survey will be released at 10.30am AEDT. Business Insider will have full coverage as soon as the data drops.