Australia Consumer Sentiment Falls Sharply

Australia’s Westpac–Melbourne Institute Consumer Sentiment Index rose 1.2% mom to 91.6 in March 2026, reversing a 2.6% drop in the prior month and marking the first rise since last November. Household finances were mixed, with assessments up 1.8% to 80.2 compared with a year earlier, but expectations for the next 12 months edged down 0.1% to 97.6. Views on economic conditions over the next year fell 2.9% to 85.9, but the five-year outlook gained 2.4% to 96.3. The “time to buy a major household item” index strengthened 4.9% to 98.0. Unemployment expectations added 3.8% to 134.7. Westpac economist Matthew Hassan said domestic developments have been mixed, with 2025 growth exceeding the central bank’s expectations, though the latest survey suggests consumer momentum is cooling. He also noted rising global uncertainty has disrupted energy supplies and clouded the growth outlook. On balance, Westpac expects the RBA to hold rates in March, with any potential hike likely pushed further out.

Australia’s Westpac–Melbourne Institute Consumer Sentiment Index dropped 2.6% mom in February 2026 to a ten-month low of 90.5, extending January’s 1.7% fall and marking the third straight monthly decline. The latest result highlighted inflation concerns and the impact of the central bank’s 25bp rate hike earlier this month, the first in over two years. Household finances weakened further, with assessments down 4.7% to 78.8 compared with a year earlier, and expectations for the next 12 months slipping 0.1% to 97.7. Meanwhile, views on economic conditions over the next year edged up 0.1% to 88.5, but the five-year outlook fell 2.5% to 94.1. The “time to buy a major household item” index shrank 5.6% to 93.5. Unemployment expectations added 0.3% to 129.8, in line with historical averages. Westpac’s Mathew Hassan said that while another RBA rate hike cannot be ruled out, the board is likely to wait for more data at the March 16–17 meeting, with the next 25bp move potentially coming in May.

Australia’s Westpac–Melbourne Institute Consumer Sentiment Index slipped 1.7% mom in January 2026 to a three-month low of 92.9, extending December’s sharp 9.0% plunge as shifting interest rate expectations weighed on confidence. Sentiment showed mixed signals: the one-year economic outlook fell 6.5% to 88.4, while the five-year view edged up 0.9% to 96.5. Household finances also diverged, with assessments rising 2.3% to 82.7 compared to a year ago, but views for the next 12 months fell 4.5% to 97.8. The “time to buy a major household item” index edged up 0.2% to 99.1. Meanwhile, views on unemployment worsened, with the index climbing 2.1% to 129.4, slightly above its long-run average, signaling rising concern over job prospects. Westpac’s head of Australian macro-forecasting, Mathew Hassan, said consumers are increasingly wary about 2026, noting that recent strong inflation and resilient domestic spending have heightened fears that cost pressures are not yet under control.