Consumer sentiment has remained soft in what economists have labelled a disappointing result.
The
Westpac Melbourne Institute of Consumer Sentiment edged up slightly in July, climbing 1.9% from 93.2 in June to 94.9. The result puts the index only 2% above its low in May, and 14% below its most recent high in November 2013. The index is now 10% below its 2013 average.
"This is another disappointing result for the Index. We had expected a stronger bounce back in the index following its 7% tumble in the aftermath of the Commonwealth Budget in May," Westpac chief economist Bill Evans said.
Evans said confidence in the labour market remained "stubbornly weak". The measure could be exacerbated by unemployment figures, due to be released today by the Australian Bureau of Statistics. An AAP survey of economists revealed they expect the jobless rate to increase from 5.8% to 5.9%.
But Evans said a recovery in consumer confidence was still "the most likely prospect" over the remainder of the year.
"We expect that the high savings rates, strengthening household balance sheets and a surge in residential building will all support a solid lift in spending as the recovery in consumer confidence comes through," Evans said.
