[B]Australian Consumer Confidence[/B] surged 12.7% in June, the largest monthly gain in over 22 years, according to Westpac Banking Corp. More notably still, the metric’s value topped the “boom-bust” 100 level, suggesting optimists outnumber pessimists among the 1200 consumers polled for the survey for the first time since January 2008. Westpac’s chief economist Bill Evans called the result “truly remarkable” but qualified that “this surge in confidence can be seen as a delayed response to the significant stimulus over the last nine months.” Indeed, the forces behind June’s result have been revealed since traders learned that GDP unexpectedly grew in the first quarter, boosted by the government’s generous stimulus efforts. The real question going forward will be whether Australia is able to sustain positive momentum after the flow of stimulus cash dries up. Evans seems to share our cautious assessment, saying “the positive confidence reaction in June is probably premature [considering] domestic spending fell 1 percent [in the first quarter despite the positive headline figure], the sharpest fall since the December quarter of 2000.” A survey of economists conducted by Bloomberg suggests the economy will shrink for the remainder of 2009.
