Weekly Market Recap
I feel good
Week in review
- Australian unemployment rate drops to 5.6%
- U.S. headline inflation rises to 2.6% y/y
- Australian consumer confidence up 6.2% m/m
- RBA April meeting minutes
- Australia March retail sales (preliminary)
- U.S. and Eurozone April PMI manufacturing indices
Thought of the week
Consumer sentiment in Australia has rocketed to a level not seen in over a decade. The ending of JobKeeper and news of the delays to the vaccine roll-out were not enough to offset the positives of limited COVID cases and loosening of domestic restrictions. Below the surface the employment expectations and spending intentions in the survey did come back a little, but remain very strong. Household consumption accounts for more than half of real GDP in Australia and means the propensity for spending can have a powerful impact on growth. The overall strength in consumer confidence bodes well for the economic outlook if it does lead to a reduction in precautionary savings and greater levels of spending in the quarters ahead. There is also the potential that households opt to use excess savings to pay down debt. Some of the spending impulse has passed, given the earlier economic re-opening in Australia, and is reflected in the notable drop in the savings rate in 2020.
I feel good
Australian consumer confidence
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