Consumer sentiment settles
Consumer sentiment has seemingly stabilised following a two-month fall caused by a Liberal party leadership spill, mortgage rate increases, declining house prices and rising petrol prices weighing on the Australian public.
According to the Westpac-Melbourne Institute Consumer Sentiment Index, the headline index has held slightly above the baseline of 100, reaching 101.5; signalling that optimists just barely outweigh the pessimists.
“It is encouraging that these negatives seem to have, at least for the time being, run their course,” Westpac chief economist Bill Evans said in the report.
“Several positives have likely helped stabilise the Index, including strong economic growth, a solid labour market and ongoing recovers in the previously weak mining states.”
The report noted that consumer sentiment toward the economy was mixed, with views toward the next 12 months seeing a 2.3 per cent rally, while longer term expectations over five years softened; having fallen 9.1 per cent from the five year high recorded in July.
Sentiment related to spending showed little change, however, retaining the downbeat tone seen in recent months. The ‘time to buy a major household item’ sub-index rose 0.1 per cent, but is still around the lowest level seen since November 2017.
The report also noted that attitude toward family finances are up 4.5 per cent compared to a year ago, while sentiment toward family finances 12 months from now are up 0.4 per cent.
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