Australian consumer sentiment dips in Jan 2024: Westpac

17 Jan '24

2 min read

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Insights

In January 2024, Australia's consumer sentiment index fell 1.3 per cent to 81, reflecting ongoing concerns about living costs and high interest rates.
This pessimism persists despite eased fears of rate hikes.
Consumers remain cautious about interest rates, outweighing any optimism.
The country's unemployment expectations index rose to 130.7.

Australia saw continued pessimism among consumers at the start of the year, as the Westpac Melbourne Institute Consumer Sentiment Index experienced a decline of 1.3 per cent to 81 in January 2024 from 82.1 in December 2023. Concerns about the cost of living and high interest rates are persisting factors contributing to the low sentiment levels.

This latest reading is among the most pessimistic since the survey's inception in the mid-1970s, being in the bottom 7 per cent of all observations. Such levels of pessimism have only been surpassed during the early 1990s recession, as per Westpac.

Despite the overall decline, there was a notable easing in fears of further interest rate increases. However, despite this easing, consumers remain more cautious about the interest rate outlook in Australia than both financial markets and economists. The sub-index details suggest that the modest boost from a less threatening interest rate outlook was outweighed by further deterioration in family finances and growing concerns about the economy's medium to longer-term prospects.

The Westpac Melbourne Institute Unemployment Expectations Index also saw an increase of 1.4 per cent in January to 130.7, indicating that more consumers expect unemployment to rise in the year ahead. There are regional differences, with consumers in New South Wales showing more comfort about the employment outlook compared to other major states.

Fibre2Fashion News Desk (DP)

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