August is here and the wattle is beginning to bloom, a sure sign that spring is just around the corner. The Australian economy has been a bit slower to spring to life, but there are some green shoots.
Australian consumers had a new spring in their step as July progressed thanks to a rising Aussie dollar, lower petrol prices and a jump in full-time employment. The ANZ/Roy Morgan consumer sentiment rating rose 2.3 per cent in the final week of July to its highest level in five months. While the unemployment rate held steady at 5.6 per cent in June, the growth in part-time jobs stalled as full-time jobs posted the biggest back-to-back monthly gains in 29 years. Inflation is also under control, with the June quarter CPI easing from 2.1 per cent to 1.9 per cent.This is below the Reserve Bank’s target band of 2-3 per cent, reducing the chance of a rise in official interest rates in the short-term. Petrol prices fell close to the $1 mark in many capital cities.
The Aussie dollar ended the month at a two-year high after pushing above the US80c level, which will please travellers but not our exporters. The rise reflects a weaker US dollar rather than any local economic issues. Earlier in the month Aussie businesses were brimming with confidence. The NAB business confidence index was up from +7.5 points to +9.3 points after the business conditions index reached a 9-year high.
Read more from our August Newsletter here:
- Home ownership in the spotlight
- Can’t afford to buy a home? What about a share of one?
- The risky business of cryptocurrency investment
- What’s really holding you back from your goals?