Australia Consumer Sentiment Weakens for 2nd Straight Month

Australia’s Westpac–Melbourne Institute Consumer Sentiment Index fell 4.7% mom to a six-month low of 80.4 in October 2026, slowing from a 5.2% decline in the prior month while marking a second straight month of decline. Confidence remained under pressure from higher fuel and interest rates, as views on household finances weakened, with assessments of finances over the past year falling 8.0% to 66.9, while expectations for the next 12 months declined 6.4% to 88.4. Economic sentiment was also subdued, with the one-year outlook slipping 1.6% to 78.3 and the five-year outlook edging down 0.4% to 85.5. The index measuring whether it was a good time to buy major household items fell 7.1% to 83.0, while unemployment expectations rose 1.9% to 142.1. Westpac economist Matthew Hassan said previously flagged upside risks to inflation were materialising, while the RBA was also wary of demand pressures from the AI and data-centre boom. He expects another rate hike at the RBA’s November meeting.

Australia’s Westpac–Melbourne Institute Consumer Sentiment Index plunged 5.2% mom to 84.4 in September 2026, reversing a 6.0% rise the prior month and marking its first decline since June, as higher fuel prices and concerns over further rate hikes weighed on confidence. Views of household finances weakened sharply, with assessments of finances over the past year tumbling 9.2% to 72.6, while expectations for the next 12 months slipped 3.8% to 94.5. Economic sentiment deteriorated, with the one-year outlook down 4.0% to 79.5 and the five-year measure declining 4.5% to 85.8. The gauge of whether it was a good time to buy major household items dropped 4.8% to 89.3, while unemployment expectations rose 2.8% to 139.4. Westpac economist Matthew Hassan said the strong July CPI reading increases the likelihood of a future rate hike, but the RBA is unlikely to act on a single monthly inflation reading given the series’ volatility, with the next CPI update due a day after the policy meeting.

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.