The Westpac-Melbourne Institute Consumer Sentiment Index rose by 7.8 per cent in August from 92.2 in July to 99.5 in August.
Westpac Chief Economist Bill Evans says this is a very surprising result.
“Movements of the index of this magnitude are unusual and generally associated with highly significant events, such as interest rate moves or commonwealth budgets,” he said. “There is no comparable event that may have triggered this response, although the solution may lie with international issues and housing.”
Retail Council CEO Anna McPhee says the bounce in consumer sentiment this month compared with July is welcome.
“Improved sentiment may suggest the benefits of the two cuts to the official cash rate this year are being felt by households, given the 7.8 per cent rise in sentiment regarding family finances versus a year ago and the 10 per cent increase in sentiment looking ahead 12 months,” she said.
“The retail sector expects consumer sentiment to continue to bounce around in the coming months, given underlying uncertainty among consumers about forward-looking economic conditions over the next 12 months and five years.
“The consumer sentiment series continues to be volatile – but retail spending has continued to grow since September 2013, with recent figures showing year-on-year growth of 4.9 per cent – and is an alternative view into how households are feeling at the moment.”