Strong consumer and business confidence readings this week suggest the economy will be accelerating out of the worst recession since Great Depression at a fair clip.
It’s been an impressive roll call.
The ANZ-Roy Morgan consumer confidence index has now risen for 10 weeks in a row, recovering to its pre-pandemic level in March.
The Westpac-Melbourne Institute consumer sentiment index has soared to a seven-year high with encouraging signs for retailers heading into their peak Christmas period.
The mood of business is also on the up with the National Australia Bank business confidence index jumping to its highest level since mid-2019.
“Confidence is rebuilding in our economy,” Prime Minister Scott Morrison told parliament on Wednesday.
“Australians are getting their confidence back as we emerge from this recession.”
NAB is predicting the September quarter national accounts due in early December will show the economy expanding by three per cent after the steep seven per cent contraction in June quarter.
But its chief economist Alan Oster warns the outlook will remain “bumpy” with future quarters not so clear.
“We have still got the issue about what is going to happen as some of things like JobKeeper, etcetera fade way and also as unemployment goes up,” he said in a NAB podcast giving an update on its economic forecasts.
Like Treasury and the Reserve Bank, NAB is expecting the jobless rate to peak at eight per cent, although not until next year.
Treasury and the RBA expect unemployment to peak in December.