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Consumer confidence up on rate cuts
Consumer confidence up on rate cuts

Confidence has returned to Australian shoppers with the Reserve Bank and Barack Obama partly responsible.

The Westpac-Melbourne Institute measure of consumer sentiment lifted in November by 5.2 per cent.

It now shows there are more optimists than pessimists amongst the nation's shoppers for the first time in six months.

There were increases across all sub-measures of the index including an 11 per cent jump in the confidence of people about their finances compared to a year ago.

Time to buy a major household item and time to buy a vehicle also showed increasing confidence levels.

Westpac chief economist Bill Evans said the lift in confidence to a point where the country had more optimists and pessimists was a sign the Reserve Bank's cuts in interest rates were finally starting to work.

He said there were signs other issues, including Mr Obama's victory last week, at play.

"Other issues that may have impacted confidence over the month were the unemployment rate not increasing, despite extensive media speculation of a weak result, and the decisive Obama victory in the US presidential election," he said.

Mr Evans said the fact confidence among 18 to 24 year olds jumped by 17 per cent, the largest increase since January 2010, signalled the Obama victory did have a positive impact on local consumers.

He said despite the improvement, confidence was only marginally ahead of where it was a year ago.

But he said there were encouraging signs for the overall economy.

"With households more confident around their finances and more positive around their spending intentions than last year this November result should be of some comfort to retailers that the critical Christmas spending period will show some improvement on last year," he said.