RTTNews - Australian consumer confidence in June showed the largest rise in 22 years, after the economy registered positive growth in the March quarter, the latest Westpac and Melbourne Institute survey showed Wednesday.
Consumer sentiment rose 12.7% to 100.1 points in June from 88.8 in May. This was also the second largest increase in the index since the survey began in 1974. A reading above 100 indicates optimists outnumber pessimists.
A number of factors were responsible for the rise in consumer sentiment. The positive news about GDP growth was from consumers' perspective encouraging since they had already benefited from a 385 basis points cut in the variable mortgage rate, and from A$14 billion in government transfers with another A$5 billion to come. With the employment rate falling to 5.4% in April, consumer became confident the worst had passed, Westpac Senior Economist Bill Evans noted.
Moreover, driven by the consistent improvement in financial assets particularly global share markets, consumer sentiment has been on the rise in most of the major economies, Evans pointed out.
In June, four of the five sub indices increased, with only the index measuring the time to buy major household items showing a decline in the month, the report added.
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