“The modest rise in confidence leaves it well below its long run average. The weakness in the time-to-buy-a-household-item index is particularly disappointing, given that tax cuts should be supporting this measure. Rising concerns over the impact of the stimulus, combined with the lift in the unemployment rate in August and ongoing global easing in monetary policy settings, suggest to us that the RBA will likely cut rates again in October. So far, though, consumers seem impervious to both fiscal and monetary stimulus, and the combination of weak wage growth and high levels of debt may prove to be the more dominant driver of confidence and spending.”
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