Australian consumers fret over the economy in December: survey
AUSTRALIAN consumer sentiment took a step back in December as concerns about the economic outlook outweighed an improvement in people’s own finances, a survey showed on Tuesday.
The Westpac-Melbourne Institute index of consumer sentiment fell 2.0 per cent in December, unwinding a little of the sharp gains seen over the previous two months. The index is still up 13 per cent on a year ago but at 92.8 showed pessimists again outnumbered optimists.
Westpac senior economist Matthew Hassan said the pullback was likely influenced by a disappointing reading on economic growth released in early December.
As a result, the index measuring the economic outlook for the next 12 months slid 9.6 per cent and the outlook for the next five years dropped 7.9 per cent.
In contrast, the measure of family finances compared to a year ago rose 6.9 per cent, still benefiting from tax cuts introduced from July.
The biggest decline came in those with mortgages, reflecting doubts about when borrowing rates might finally fall.
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The Reserve Bank of Australia kept interest rates unchanged at 4.35 per cent all year, though it did soften its tone this month and opened the door to easing as early as February.
There was some improvement in the “time to buy a major household item”, which firmed 4.8 per cent but remains below the 100 break-even mark.
A separate survey from ANZ showed its confidence index fell 1.6 per cent last week, largely due to a sharp drop in shopping intentions following Black Friday sales.
Westpac’s time to buy a dwelling index fell 6.0 per cent in December to a pessimistic 81.6, reflecting high mortgage rates and a lack of affordability. REUTERS
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