Australia’s Consumer Sentiment Sees Improvement in October – Westpac

Australian consumer sentiment reached its highest level in over two years in early October, according to a recent private survey. This increase comes as confidence grows that local interest rates will not rise any further.

The Westpac-Melbourne Institute consumer sentiment index rose by 6.2% to 89.8 in October, marking the strongest reading since early 2022. While consumers continue to express a generally pessimistic outlook, their sentiment has been positively influenced by interest rate cuts in other countries, along with indications from the Reserve Bank of Australia that local interest rates are likely to remain steady.

Despite these improvements, concerns about persistent inflation and a challenging housing market still weigh heavily on consumers, as noted by Westpac. The latest figures reflect a significant recovery in sentiment after previous declines driven by worries about high inflation and interest rates.

Additionally, the strong labor market has provided some support for consumer attitudes. Westpac anticipates that the Reserve Bank of Australia will maintain current interest rates for the remainder of the year and may soften its previously hawkish stance in the months ahead.