Useful Facts Without Opinions: Consumer confidence and employment
Buying a home, and an investment property, usually includes a pleading visit to the bank manager. And when Australians are feeling good about the economy and particularly their own job security, they are naturally happier to load up on debt. So for us these two sets of info are key ones to watch when you’re attempting to forecast real estate price trends. Here’s the latest:
• “The index has fallen to 21.2 in March 2013 after spiking at 24.9 following the Christmas period when household finances are often stretched and personal debts mount.” “The latest index data suggests that the ongoing low level of interest rates, recent confirmation of solid wages, and relatively low unemployment have contributed to an easing in consumer financial stress levels”: Dun and Bradstreet’s Consumer Financial Stress Index, April 29th
• “Measures of consumer confidence had been above average”: Minutes of the Reserve Bank board meeting, May 7th
• The Westpac Melbourne Institute Index of Consumer Sentiment fell by from 104.9 in April to 97.6 in May. “This print pushes the Index back into a range where pessimists outnumber optimists for the first time since October 2012” “The results confirm our reasonable assumption that this weakness in confidence is being driven by a sharply negative response to the Budget.”
• Australia’s Unemployment Rate decreased to 5.50% in April of 2013 from 5.60% in March. The ABS reported the number of people employed increased by 50,000 to 11.663 million in April.
• Historically, from 1978 until 2013, our Unemployment Rate averaged 6.96%, reaching an all time high of 10.90% in December 1992 and a record low of 4% in February 2008.
How does this read to you? Positive or negative impact for home prices? Please share your comments.