Australian Consumer Mood Slumps to 2-1/2-Year Low

Australia’s Westpac–Melbourne Institute Consumer Sentiment Index plunged 12.5% mom to a 2-1/2-year low of 80.1 in April 2026, reversing a 1.2% rise in March. The sharp drop was driven by a surge in fuel prices amid the U.S.–Israel conflict with Iran, as well as a further 25bp rate hike by the Reserve Bank. Household finances weakened sharply, with assessments vs a year ago down 16.7% to 66.8, and expectations for the next 12 months fell 13.9% to 84.0. Meanwhile, views on economic conditions over the next year dropoed 12.4% to 75.3, and the five-year outlook eased 5.1% to 91.4. The “time to buy a major household item” index slid 15.0% to 83.3. Job loss fears climbed 9.7% to a 5-1/2-year high of 147.8. Westpac economist Matthew Hassan noted the current shock is weighing more heavily on labour market expectations than the 2022–24 'cost-of-living crisis'. He expects the central bank to stay focused on inflation, forecasting a 25bp hike in May, with further tightening later this year.

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.