Australian consumer confidence fell for a third consecutive month in November to its lowest level in four years, as a run of interest rate rises added to cost-of-living pressures and soured households’ view of the economy.
The Westpac–Melbourne Institute index of consumer sentiment fell 2.7 per cent to 78.2 in November, after declines of 4.7 per cent in October and 5.2 per cent in September. The index is down almost 25 per cent from a year earlier, with pessimists heavily outnumbering optimists.
“Australian consumers remain deeply pessimistic, sentiment continuing to plumb extreme lows,” said Matthew Hassan, Westpac’s head of Australian macro-forecasting. “Consumers are bracing for more rate rises.”
The survey was taken as the Reserve Bank of Australia raised interest rates for the fifth time this year, taking them to 4.85 per cent, an 18-year high, in its effort to bring inflation under control.
The impact of the latest rise was visible across the survey’s components. Its measure of the economic outlook over the next 12 months fell 10.2 per cent, while the sub-index measuring whether it is a good time to buy a major household item dropped 3.7 per cent.
The result points to weaker household spending ahead at a time when the central bank is still tightening, and it underlines how far sentiment has fallen even as Australia’s labour market has so far held up. Further rate rises, if they come, would test that resilience further.
Note: this report is based on a single source, the Westpac–Melbourne Institute survey as reported by Reuters.
Sources: Reuters — “Australian consumer sentiment hits four-year low in November as rates rise”
