Despite political uncertainty.

Consumer confidence recovered 2.0% last week to 114.8, its highest level in seven weeks, in the latest ANZ-Roy Morgan Consumer Confidence Index. And maybe we can thank the horses.

ANZ head of Australian economics, David Plank said consumers were more upbeat following the Melbourne Cup carnival, particularly towards economic conditions, despite the current political uncertainty. “Overall economic conditions have broadly trended up since the recent low in mid-September, with sentiment towards current economic conditions recovering to its long term average, likely to be reflecting ongoing labour market strength,” he said.

The rise was primarily driven by a bounce in sentiment towards economic conditions, only slightly offset by a fall in sentiment towards current financial conditions. Household views towards both current and future economic environments rose solidly at 3.5% and 7.0% respectively, their highest point in 14 weeks.

Households however were slightly more pessimistic when it came to personal finances, although their views towards future situations remained unchanged from last week, following three consecutive falls. The ‘time to buy a major household item’ index rose 1.0% last week, more than reversing the previous week’s 0.5% fall. The weekly value for inflation expectations bounced back to 4.5% last week after coming in at 4.3% the previous week.

Wage and employment data out later this week are likely to drive confidence in the near term, Plank said. “We expect an uptick in Q3 wages due to the larger-than-usual minimum wage hike and a positive number on the employment front, suggesting that confidence should receive some support even as political uncertainty rises.”