Australia’s July consumer optimism restrained by rate surprise, survey shows
[SYDNEY] A measure of Australian consumer sentiment improved marginally in July, a survey showed on Tuesday, though optimism on the economy was tempered by a central bank decision to skip a cut in interest rates.
A Westpac-Melbourne Institute survey showed its main index of consumer sentiment crept up 0.6 per cent in July, following an equally restrained 0.5 per cent increase in June.
The index was 12.6 per cent higher than a year earlier at 93.1, but being below 100 that still meant pessimists outnumbered optimists.
The Reserve Bank of Australia surprised markets last week by holding rates at 3.85 per cent, when many had looked for a further cut following easings in February and May.
Matthew Hassan, Westpac’s head of Australian macro-forecasting, noted those surveyed before the decision reported an index reading of 95.6,while those surveyed after produced a reading of just 92.
“The reaction checked what would probably have been a solid rise,” said Hassan. “It still leaves the consumer mood stuck at ‘cautiously pessimistic’ levels overall.”
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A separate weekly survey from ANZ found a similar souring in mood, as its index dropped 2.1 points to 86.5 led by concerns over the economic outlook.
Likewise, the Westpac survey showed its index of the economic outlook for the next year nudged up 1.8 per cent, while that for five years fell 2.8 per cent.
Family finances compared to a year ago did enjoy a bounce of 5.0 per cent, while the outlook for the next 12 months picked up by 2.6 per cent.
In a disappointing note for retailers, the index of whether it was a good time to buy a major household item dropped 2.6 per cent. REUTERS
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