Q3 Earnings Alert! Plan early for this week’s stock reports with all key data in 1 placeSee list

Australia consumer sentiment worsens in September- Westpac

Published 12-09-2023, 06:34 am
© Reuters.
AUD/USD
-
AXJO
-

Investing.com-- Australian consumer sentiment deteriorated further in early-September, a private survey showed on Tuesday, as dwindling household savings, sticky inflation, and high interest rates largely outweighed a less hawkish outlook for the RBA. 

The Westpac-Melbourne Institute Index of Consumer Sentiment dropped 1.5% to 79.7 in September, remaining close to its worst level since the 2020 COVID-19 pandemic. The reading was driven by persistent pessimism among consumers, especially over rising rents and a renewed surge in fuel prices. 

While consumers saw a lower chance of more interest rate hikes from the Reserve Bank of Australia, especially after inflation eased substantially this year, they also saw few chances of an interest rate cut over the next year. 

Concerns over the budget and taxation also dented sentiment, as consumers looked out for more government support- particularly tax relief- amid an increasing cost of living. 

Rising fuel costs were a major contributor to increased living costs, especially as global oil prices shot up to 10-month highs in recent weeks. Higher oil prices also spurred concerns over a resurgence in inflation.

While inflation has fallen substantially this year, it still remains well above historical averages, as well as the RBA’s annual 2% target. But the central bank has now kept rates on hold for four straight months, and has reiterated a data-driven approach to future hikes. 

“We continue to expect rates to remain on hold until the August Board meeting in 2024. By then we anticipate inflation to have fallen to 3.4%; the unemployment rate to have risen to 4.5% and annual growth in consumer spending to have slowed to just 0.8%.

By then it will certainly be time for both the monetary and fiscal authorities to provide some much-needed support for Australian households,” Westpac Chief Economist Bill Evans said in a note. 

Consumers remained largely risk-averse with their investments, and also showed little inclination towards buying a house.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.