Daily Commentary BY THE CURVE TEAM –

Consumer Confidence Soaring

15th of April, 2021

Consumer sentiment is extremely well placed to continue to drive the economic recovery.

Following the remarkable business survey results from Tuesday, consumer confidence reached an 11-year high for April. It rose 6.2% from an already elevated level to 118.8.

There were some seeming contradictions in the survey. One of which was the dichotomy between the unemployment index and family finance over the next 12 months, which were up 5.6% and 5.4% respectively.

A rise in the unemployment index implies a larger expectation of job losses. This may have been influenced by the end of JobKeeper, but the rapid increase in jobs may have offset this to result in a gain in family finances.

Time to buy a dwelling was down 7.9% despite the overall positive sentiment. This is likely due to the run up in house prices, with expectations up 2.7%.

The next phase for the economy in transitioning from government spending and to more spending on services relies on consumer sentiment. It will ensure the economy finds a sustainable path of growth.

Today, employment for March is released. This is the final release of data before JobKeeper ended, so will determine the effect JobKeeper could have.

Josh Stewart

Associate - Money Markets