Not surprisingly the flooding in Queensland has hit consumer sentiment which took a dive across the country this month.
The fall was to be expected given that the story has been dominating the headlines and TV screens for much of the past month.
The Westpac-Melbourne Institute Index of Consumer Sentiment fell 5.7% in January to 104.6, from 111.0 in December.
It was the first survey conducted since the onset of flooding in Queensland.
Westpac chief economist Bill Evans said in a statement it was an "extremely difficult survey to interpret" given the limited access to Queenslanders during the early days of the floods.
The survey covered the period of January 10 to Sunday January 16 and coincided with some of the worst days of the floods.
"With limited communication possible, the Queensland component of the survey was held steady around 20 per cent of the total but reduced coverage was given to the metropolitan area," Mr Evans said.
The result represents a significant fall in the index although it is still around 4% above its long term average, he said.
It is now down 12.9% from year ago and is 8% under its 2010 average.
"Because of the extreme events in Queensland and the lower than usual representation from Brisbane, it is interesting to assess the national Index excluding Queensland," Mr Evans said.
The "ex-Queensland" Index points to a significant fall in confidence of 3.2%, he said.
Despite these other states not being directly affected by the floods in their major cities; it is likely that perceptions of the implications of the floods for the national economy and their own financial positions have been adversely affected.
The survey also showed respondents were anxious about the short term outlook.
The outlook for economic conditions over the next 12 months fell 15.7% (12% excluding Queensland), whereas the five year outlook was up by 0.2% (2.8% ex-Queensland).
The one year outlook for family finances was down by 5.6% (5.3% ex-Queensland).
Mr Evans said there was an absence of other news which usually impacts sentiment, such as interest rates.
"The Reserve Bank Board does not meet in January, ensuring steady interest rates, the unemployment rate fell to a two year low of five per cent but jobs growth was much weaker than expected, while international economic conditions were benign," he said.
Meanwhile there’s another hint that the strong jobs market might be cooling.
The December labour market report showed a fall in the unemployment rate to 5%, but only 3,200 jobs were created in the month, the lowest for some time.
Now the federal government’s index of skilled job vacancies has dropped nearly 22% to 33.8 in January in seasonal terms, accelerating from a 2.8% fall in December.
The index, based on job advertisements in major newspapers, was 21.6% lower than a year earlier.
Vacancies fell in trend terms in all three occupational groups, with associate professionals down by 5.5%, professionals down by 5.6% and trades down 4.2%.
The department said its Internet Vacancy Index, which lags the main newspaper-based index by one month, rose by 1.3% between November and December to 90.6, with around 237,300 positions added.
Based on four large Internet recruitment sites, it was 18.7% higher than December 2009, but was 32% under the March 2008 peak.
But it should be pointed out that newspaper job ads are now around 5% of all jobs advertised each month, the rest being on the internet.
So the headline fall for the survey might be very misleading.
