Australia Consumer Sentiment Hits 9-Month High

Australia’s Westpac–Melbourne Institute Consumer Sentiment Index jumped 6.0% mom to 88.9 in August 2026, accelerating from a 4.1% rise in the prior month and marking its fastest gain since November 2025. However, the index remained almost 10% below its level a year earlier. Sentiment strengthened as mortgage holders became less concerned about further interest rate increases. Views of household finances brightened, with assessments of the past year surging 12.6% to 80.0, while 12-month expectations rose 1.8% to 98.2. Economic sentiment also improved, with the one-year outlook up 5.8% to 82.8 and the five-year measure rising 3.2% to 89.8. The gauge on whether it was a good time to buy major household items jumped 8.1% to 93.8, while unemployment expectations increased 4.4% to 135.7. Westpac economist Matthew Hassan said the Reserve Bank has scope to hold the cash rate after three hikes this year while assessing the impact of tighter policy and whether underlying inflation has peaked.

Australia’s Westpac–Melbourne Institute Consumer Sentiment Index climbed 4.1% to 83.9 in July 2026, reversing June’s 2.9% fall as worries over energy costs, rising rates, and labor market weakness eased. Yet confidence remains historically fragile, still lodged in the bottom decile of the survey’s 50-year record and vulnerable to global shocks, particularly Middle East tensions. Households showed brighter views of their finances, with assessments of the past year up 5.6% to 71.1 and 12-month expectations surging 13.4% to 96.5. Economic sentiment improved, with the one-year outlook up 0.6% to 78.3 and the five-year measure rising 0.7% to 87.1. The gauge on whether it is a good time to buy major household items edged up 0.5% to 86.8, and unemployment expectations fell 7.1% to 129.9. Westpac economist Matthew Hassan cautioned that inflation remains the Reserve Bank’s central concern, with the June-quarter CPI likely decisive ahead of the August meeting, where he expects another 25bp hike.

Australia’s Westpac–Melbourne Institute Consumer Sentiment Index dropped 2.9% month-over-month to 80.6 in June 2026, reversing May’s gain and marking its fourth decline this year. Cost-of-living pressures remained the dominant drag, with the temporary halving of the fuel excise tax offering only fleeting relief. Household finances weakened sharply: assessments versus a year ago dropped 7.5% to 67.3, while 12-month expectations slid 8.5% to 85.1. Views on the broader economy were mixed, with the one-year outlook up 4.9% to 77.8 but the five-year measure down 3.2% to 86.5, a three-year low. The “time to buy a major item” index rose 0.9% to 86.4, and unemployment expectations edged down 0.1% to 139.8. Westpac economist Matthew Hassan said the impact of three rate hikes this year is increasingly evident, but inflation remains the immediate concern, with energy costs yet to fully feed through. While a pause is possible at the next meeting, Westpac expects further tightening in the year.