The coronavirus and political chaos in the US are hot topics in the headlines today. The Morrison government is under pressure to get the coronavirus vaccine moving and Washington DC is reeling after yesterday's raid of the US Capitol building.
Coming up this Tuesday, the monthly Westpac-Melbourne Institute Consumer Sentiment Index number will be released. The index measures the overall level of consumer confidence in economic activity.
Let's take look at the last index reading and consider how the recent reign of chaos in the States may or may not have an effect.
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A December 10-year high
Remarkably, the last consumer sentiment numbers released in December 2020 marked a 10-year high.
The announcement credited the resilience of Australia's financial system and the country's fast response to COVID as indicators of how consumer sentiment reached such an incredible result.
In response to this impressive record, Westpac chief economist Bill Evans boldly stated, "After only eight months the evidence seems clear that sentiment has fully recovered from the COVID recession."
So what does this tell us? It basically says that, regardless of the lockdown doom and gloom stories and vaccine worries we regularly read about, people are still spending their money.
Markets soar as Washington dives
While the US spent yesterday reeling during the violent riots that stormed the US Capitol building, the S&P/ASX 200 Index (ASX: XJO) had a party. The benchmark index jumped 1.59% according to Thursday's close and opened this morning with a 0.22% gain.
Regardless of what might be happening in the streets of DC, investors are seemingly just happy to see the Democrats making their way back into the White House. Perhaps the political turmoil in the US has become business-as-usual to many market players?
What should we expect from the Westpac Consumer Confidence report?
Throughout the coronavirus pandemic and recent rattles caused by US elections, Australian consumers have continued to keep the ship sailing. Employment numbers are improving and people are buying houses.
These are the type of economic indicators the Westpac Consumer Confidence report takes into consideration and will be reflected when the latest index result is released.
According to the most recent readings, Australian consumers are resilient. And, regardless of a global health crisis and borderline anarchy in Washington DC, the share market has remained steady. Coming up on Monday, we'll learn about what the latest consumer sentiment analysis has to say about all of this.
