Westpac-Melbourne Institute Australian consumer sentiment index up 2.9

“The consumer mood has improved slightly but optimism remains in extremely short supply. At 82, the latest Index read is still in deeply pessimistic territory, consistent with a continuation of the contraction in per capita spending seen since late last year. While there are some faint glimmers of hope around family finances and the outlook for jobs, these are being overshadowed by still-high inflation and renewed rate rise concerns.” Westpac’s senior economist Matthew Hassan commented.

The Reserve Bank of Australia’s extended pause on rate hikes continues to see only a muted lift in sentiment.

The annual inflation moved back above 5 per cent in August. No change in downbeat near-term expectations for the economy was observed. Labour market conditions remain a notable source of support, Westpac Institutional Bank, a division of Westpac Banking Corporation, said in a release.

The sub-index tracking assessments of ‘finances vs a year ago’—a particularly important indicator for spending activity—rose by 2.7 per cent in October, but at 63.1, remains at extremely weak levels, below the levels seen mid-year.

The sub-index tracking expectations for ‘finances next 12 months’ is showing a more promising improvement—up by 2.6 per cent month on month to 93.9 in October and up by 11.8 per cent since June.

The medium-term view is less pessimistic though: the ‘economic outlook, next five years’ sub-index is up by 2.1 per cent to 92.4, in line with the long-run average of 92. This suggests consumers remain confident that the current cost of living problems will eventually be brought under control.

The Westpac-Melbourne Institute unemployment expectations index declined by 2.7 per cent to 127.3 in October, dipping back below the long-run average of 129, the release added.

Fibre2Fashion News Desk (DS)