Australian Consumer Mood Falls on Rate Concerns

2025-09-09 00:48 By Farida Husna 1 min. read

Australia’s Westpac-Melbourne Institute Consumer Sentiment Index dropped 3.1% mom to 95.4 in September 2025, reversing August’s 5.7% gain when the index reached 98.5, the highest in 3-1/2 years.

The decline reflected renewed concern over the interest rate outlook, even as the cost-of-living crisis eases and monetary loosening provides some support.

Views on the economy weakened, with the 12-month outlook down 8.9% to 92.2 and the 5-year outlook 5.9% lower at 92.7.

The time to buy a major household item index fell 3.4% to 98.2, while unemployment expectations rose 4.6% to 131.4, above the long-run average of 129.

Still, family finances improved modestly: compared with a year ago, the index rose 2.6% to 86.3, while expectations for the next 12 months edged up 0.9% to 107.7.

Mathew Hassan, Head of Australian Macro-Forecasting, said the survey shows recovery since mid-2024 remains slow, with further easing likely.

He expects the RBA to cut rates by 25bps in November and twice more in 2026.



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