Is the Aussie consumer back?

The household savings rate is on a downtrend, spelling good news for the equities market and the economy at large.

Summary: While policy makers fret about Australia’s declining terms of trade, another more significant development is taking place: consumer confidence is on the rise. The latest data show the household savings rate is falling, even with policy makers and their rhetoric instilling fear in the market. Consumers are finally responding to the ultra-low lending rate environment and, though it appears gradual, there is a long way to run yet.

Key take-out: The impending rise in consumer spending will positively impact numerous sectors in the Australian equities market, including the retailers, the banks, consumer staples and various industrial companies.

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