Investing.com — Australian consumer confidence deteriorated sharply, with households increasingly concerned about their finances, the economic outlook and jobs as cost-of-living pressures intensified, data from Westpac showed on Tuesday.
The Westpac-Melbourne Institute Consumer Sentiment Index fell 4.7% to 80.4 from 84.4 in September, missing a forecast 1.2% decline that would have put the index at about 83.4. The 80.4 reading was also among the weakest recorded since the survey began in the early 1970s.
Westpac said the latest Reserve Bank of Australia rate increase to 4.6%, the highest level since 2011, appears to have sharply rattled consumers.
Sentiment among the 60% of respondents surveyed before the rate decision was 86.9, but plunged to 67.2 among those surveyed after the announcement.
The nearly 20% difference between the pre- and post-RBA samples was the largest since Westpac began tracking daily survey responses in 2019, the bank said.
Fuel prices have also become a major drag, with average weekly pump prices rising above A$2.30 a litre, nearly 25% higher than at the start of the year. Meanwhile, the standard variable mortgage rate is expected to move above 9%, according to Westpac.
Westpac said pessimists outnumbered optimists in 102 of 106 consumer groups tracked by the survey, while more than 80% of consumers expected mortgage rates to rise over the next year.
The report also showed growing unease about the jobs outlook, suggesting pressure on household finances is broadening beyond inflation and borrowing costs.
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