The persistently strong labour market and Black Friday sales are likely leading to a rise in consumer confidence, which improved for the second week in a row.
The weekly pulse check of consumer sentiment remains well below historical averages, sitting at levels last seen in the early stages of the pandemic.
The one percent lift in ANZ and Roy Morgan’s consumer confidence indicator last week follows a 2.7 percent increase the previous week.
Before that, the index fell for six months in a row.
The “inflation expectations” survey question dropped slightly, which probably helped boost the overall index’s score, as did “time to buy a major household item”.
This subindex rose by 9.2 per cent last week after a cumulative decline of 13 per cent over the past few weeks.
ANZ head of economics David Plank said Black Friday sales may have bolstered this spending-related indicator.
“ANZ-observed spending data suggests that consumer spending has stayed strong, with spending momentum similar to pre-pandemic levels,” Plank said.
The strong labour market may also be keeping consumers spending, with about 32,200 jobs added to the Australian economy in October.
The official Australian Bureau of Statistics data released last week also showed the jobless rate fell to 3.4 per cent.
The ABS also released its wage price index last week, with wages lifting by 3.1 per cent lift for the September quarter.
However, data collected by HR software provider Employment Hero found wages increased by 8.4 per cent in the 12 months to October – representing a lift in real wages, with headline inflation of 7.3 percent in the September quarter.
Employment Hero co-founder Ben Thompson said the results should be viewed in the context of the Labor government’s industrial relations bill, which is intended to boost wages.
The government’s workplace bill includes expanded multi-employer bargaining rights, which has become a point of concern for the business community.
“In a nutshell, our data shows employers and employees have already adjusted salaries without needing third-party intervention,” Thompson told AAP.
He said the index, which relies on data from 135,000 small- and medium-sized businesses, provides a fairly up-to-date snapshot of wage growth compared with the backwards-looking quarterly indicator provided by the ABS.
It also captures the full amount landing in bank accounts, inclusive of bonuses and allowances, which Thompson said the bureau’s gauge does not necessarily include.
“The simple reality is that wages are moving,” he said.
The monthly index also found the number of SME-employed workers rose by 8.2 percent in the past year.
Reserve Bank governor Philip Lowe is also due to speak at a Committee for the Economic Development of Australia dinner in Melbourne on Tuesday.
His speech will be scanned for any changes in the central bank’s message that might indicate the trajectory for interest rate decisions.