Growing job security dulls pain of rate rise

Written by: parisalexandra - Posted in: Job Articles

The Westpac-Melbourne Institute consumer sentiment index for October released on Wednesday rose by 1.7 per cent to stand 47.9 per cent higher than a year ago. Economists said that the threat of further interest rate rises hasn’t dampened the spirit of consumers against the backdrop of improving job security in a recovering economy.

Since June 2007, the latest consumer confidence reading - the first since last week’s interest rate rise by the Reserve Bank of Australia (RBA) - highlighted the resilience of households by rising for a fifth straight month to its highest level.

Treasurer Wayne Swan said the data showed how vital the government’s economic stimulus strategy had been in supporting confidence, and how wrong the opposition was in rejecting the measures. He said the impact of the stimulus had kept customers coming through the doors of Australian businesses and kept more Australians in work.

“This data is another great example of stimulus being greater than the sum of its parts,” the treasurer said in a brief statement.

“This data is another reminder of just how badly (Opposition Leader Malcolm) Turnbull and (opposition treasury spokesman Joe) Hockey misjudged the global recession when they voted against the stimulus measures that have boosted confidence and kept Australia out of recession.”

The RBA raised the cash rate by 25 basis points just over a week ago to 3.25 per cent, its first increase in 19 months - saying that the need for policy to be at emergency levels had now passed.

Retail banks matched the increase in their variable home loan rates.

Economists will be looking for clues on future rate moves when central bank governor Glenn Stevens delivers a breakfast address in Perth on Thursday.

Money markets are pricing in further 25 basis-point increases in both November and December.

Source: http://www.tradingroom.com.au/apps/view_breaking_news_article.ac?page=/data/news_research/published/2009/10/287/catf_091014_182200_3186.html

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