One banker’s take on gloomy consumers

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Here’s the antidote to that Chovanec doomsayer, from Craig James at COMMSEC

According to the latest data, Aussie consumers turned gloomy over the past week. There is no major explanation for the change. Data showed that home prices continued to rise. And there weren’t too many reasons for fresh concern about the global economy. But a weaker Aussie dollar may have preyed on consumer minds. While good for businesses, a weaker Aussie can lead to costlier overseas trips, costlier on-line purchases and potentially higher prices for a raft of consumer goods. Still, the Reserve Bank would be pleased, not disappointed, that the Aussie dollar is easing – as it potentially boosts exports and therefore incomes across the economy. The Aussie dollar fell 2.7 per cent last week and consumer confidence fell by 2.3 per cent.

In banker world there is only houses and wealth effects and overseas trips. Ain’t no iron ore here!

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.