Australia’s Hot Jobs Market Puts a Floor Under Consumer Confidence

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By James Glynn

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SYDNEY–Australian consumer confidence improved marginally last week, supported by news of a sharp drop in unemployment in June to its lowest rate since August 1974.

Consumer confidence gained 0.2% last week, marking the first improvement since the last week of June, according to a survey by the Australia and New Zealand Banking Group, and pollster Roy Morgan.

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Unemployment in June fell to 3.5%, beating expectations of a lesser fall to 3.8%. Over 80,000 news jobs were created in June.

Sentiment around economic conditions next year strengthened 4% last week, while economic conditions in the next five years recovered 3.3%, according to the survey.

Still, the measure on current financial conditions declined 2.0%, marking 10 straight weeks of falls. Future financial conditions edged up 0.1%, the survey showed.

Consumers were less inclined to buy a major household item, with the measure falling 4%, its third consecutive weekly decline.

The weekly ANZ-Roy Morgan Australian Consumer Confidence Rating is based on 1,480 interviews conducted online and over the telephone during the week to Sunday.

ANZ head of Australian economics David Plank said consumer confidence steadied as concerns about the economic outlook ebbed, likely driven by the strong labor market print last week.

High inflation and rising interest rates are feeding into households’ weak assessment of their financial conditions. That is yet to show up in spending behavior, however, he added.

Inflation expectations dropped to a one-month low, with global fuel prices moderating, according to the survey.

Write to James Glynn at [email protected]


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