MNI DATA ANALYSIS:Australia Consumer Sentiment Best Since 2013

--But Sub-index on Current Family Finances Eases

By Sophia Rodrigues

     SYDNEY (MNI) - The Westpac-Melbourne Institute's monthly consumer sentiment

survey started on a positive note in 2018, posting the best monthly read since

late 2013 and the best start to a calendar year since 2010.

     The survey points to recovery in consumer spending after a disappointing

third quarter last year but fall in house price expectations and decline in view

on current family finances suggest caution is still warranted.

     Data published by Westpac-Melbourne Institute Wednesday showed consumer

sentiment rose 1.8% m/m in January to 105.1. to above 100 at 103.3. 

     Four of the five components of the index improved. The sub-index on "family

finances vs a year ago" was the only one to record a decline, down 1.1% in

January from 18-month high of 89.6 in December. 

     The key positive once again in survey was the index on unemployment

expectations, which was at a 6.5-year low of 122.8 and comfortably below the

long-run average of 130.  This signals spare capacity in the labor market could

diminish further in the period ahead, which could lead to an acceleration in

wage growth. This is important for both a rise in inflation and for outlook on

family finances, and thus household spending.

     The "time to buy a dwelling" index rose 6.1% to 106.7 but the index on

house price expectations declined 4.4% to 129.1 

     From Westpac-Melbourne Institute Index of Consumer Sentiment for January

published Wednesday:

                                        January  December

---------------------------------------------------------

Sentiment Index                           105.1     103.3

Current-Conditions Index                  105.7     105.8

Expectations Index                        104.8     101.6

Family Finances Vs Year Ago                88.6      89.6

Family Finances Next 12 Months            109.1     107.3

Economic Conditions Next 12 Months        103.7     101.1

Economic Conditions Next 5 Years          101.5      96.4

Good Time to Buy Major Household Items    122.8     122.1

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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