Ordinarily it would have been surprising that consumer sentiment did not increase for a fourth consecutive month, given the range of encouraging economic news.
It appears that after a particularly volatile year in 2005 for consumer sentiment, we may be entering steadier times in 2006.
With debt servicing ratios at record highs, house prices likely to remain soft and petrol prices stressing some household budgets a sharp resurgence in consumer spending seems unlikely,
After a particularly volatile year in 2005 for consumer sentiment, we may be entering steadier times in 2006. However, given households' high levels of debt and sensitivity to interest rates, this calm would be dramatically disturbed if interest rate concerns returned.
Australia's two-speed economy remains intact with consumer spending subdued and housing in a downswing. By contrast, business investment is surging.