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With election fever exiting the market, recent figures suggest a return to a sense of normality.
While business sentiment remains robust according to the Westpac Melbourne Institute, consumer sentiment has dropped to more realistic levels.
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Westpac's chief economist, Bill Evans, said the 2.1 per cent drop in consumer confidence in October was a ‘solid result’.
“It follows the 4.6 per cent jump in the index in September – a result largely influenced by the expected election result," he said
“The index is still 2.5 per cent above the level in August and 9.2 per cent above its level a year ago. Apart from last month, it is the highest read for the index since March this year.”
ANZ’s Australian chief economist, Ivan Colhoun, agreed that while Australians are coming back down from an election high, it is another question whether the results will continue.
“Overall business and consumer confidence have also increased recently, but much of this is likely to have been due to the prospect of a change in government at the federal election, and it is not clear whether the improvements will be sustained,” said Mr Colhoun.
On the broader economy, Mr Evans claimed there had been little evidence of a pickup in the retail spending space, and the ANZ jobs data remained relatively flat.
“Trends in job advertising appear to be stabilising, along with a number of other leading indicators of the labour market,” he said after just a 0.2 per cent rise in job advertisements in September.
“While activity in the housing market has continued to improve, there are now tentative signs that activity in some other sectors is beginning to pick up. Surveyed measures of services and manufacturing businesses point to an improvement in conditions in these sectors in September.”
