(Australian Associated Press)
The strong dollar and falling fuel prices have helped push consumer confidence to its highest level in 14 months.
The ANZ-Roy Morgan consumer confidence index jumped 1.4 per cent in the week ending March 13.
The index rose to 116.4, with the four-week moving average also trending higher at 114.2.
ANZ chief economist Warren Hogan says consumers seem to have moved on from their concerns about market volatility at the start of 2016.
He says the jump in confidence was driven by consumers’ views of their personal finances rising by 5.4 per cent to the highest level since October 2009.
“This week’s reading is the second highest seen since January 2014, reflecting a more upbeat view of consumers’ personal financial situation,” Mr Hogan said on Tuesday.
“There is a mix of factors that may be playing a part in lifting confidence recently: the stronger Australian dollar is seen as a good thing for households wanting to travel overseas, equity markets have retraced most of their earlier losses, and petrol prices have been falling sharply since the beginning of the year.”
However, he noted that consumers were less confident about the economic outlook than they were last week.
Australians’ views about the economy over the next 12 months fell 0.4 per cent, while their outlook on the next five years dropped by 3.1 per cent.
Mr Hogan also said solid jobs growth had boosted confidence and spending.
He said unemployment data for February, due to be released on Thursday, would be a key influence on consumer sentiment in coming months.
“This week’s labour market report will be important in assessing whether the recent strength has persisted,” he said.
“Further inroads into the unemployment rate will be crucial for confidence and spending.”
The Reserve Bank of Australia has also said, in its last two statements, it would monitor the labour market when making decisions about interest rates.