Aussie consumer confidence up despite economic meltdown

Australian consumer confidence made an unexpected jump in November, according to the Westpac Melbourne Institute’s monthly confidence survey.

The measure rose 4.3%, despite a whole host of negative headlines regarding the economic crisis.

While households were more pessimistic about their personal finances, this was more than cancelled out by a 16% surge in optimism about the long-term economic outlook.

Whether the increase in confidence is just a statistical blip or the start of a reversal is unclear, but a report by JP Morgan gives a possible explanation for the rise.

“It seems consumers looked through these drags on sentiment and focused on the Reserve Ban k of Australia's aggressive interest rate cuts since September, the announcement of the government's $A10.4 billion fiscal stimulus package, the implementation of the bank deposit guarantee arrangements, and the extensive measures offshore aimed at stabilising the global financial system,” it says.

Despite this month’s positive result, the long-term trend for consumer confidence across the Tasman is still on a downward path.

Pessimists still easily outnumber optimists, and have outnumbered them for the longest time since the 1990-1991 recession, showing that the financial crisis is weighing on consumers as well as businesses.