The Westpac-Melbourne Institute Consumer Sentiment Index, a monthly survey of how Australian households feel about their finances and the economy, fell 4.7% to 80.4 in October 2026, from 84.4 in September. Westpac, which publishes it, says the October read is amongst the forty worst since the monthly survey began in the early 1970s. Two others in that group came earlier in 2026, in April and June.
What is the consumer sentiment index?
It is a survey of 1,200 adults aged 18 and over across Australia, selected at random, with the results weighted to match the population. The Melbourne Institute of Applied Economic and Social Research holds the copyright and Westpac publishes the results each month. The October 2026 survey ran from 28 September to 1 October.
According to Westpac, the headline index combines five sub-indexes:
- family finances compared with a year ago
- family finances over the next year
- the economy over the next year
- the economy over the next five years
- whether now is a good time to buy a major household item
The same survey feeds separate indexes for unemployment expectations, house price expectations and mortgage rate expectations, which Westpac reports alongside the headline number.
Is consumer sentiment the same as consumer confidence?
The two names describe the same idea: how optimistic people feel about their money and the economy. Several surveys measure it, and each uses its own scale. Compare a reading only with earlier readings of the same survey and with that survey's long-run average.
Why did consumer sentiment fall in September and October 2026?
In September the index fell 5.2% to 84.4, from 88.9 in August. Westpac put the fall down to fuel and interest rates. Pump prices had gone back above $2 a litre for the first time since April, after the temporary halving of fuel excise ended. A stronger than expected monthly inflation figure for July had also raised fears of a rate rise.
The Reserve Bank then lifted the cash rate target by 0.25 percentage points to 4.60%, effective 30 September 2026. Westpac says that is the highest since 2011, with the standard variable mortgage rate set to go above 9% for the first time since 2008. Fuel kept climbing too. Average weekly pump prices pushed back over $2.30 a litre nationally, near the April peaks and up nearly 25% since the start of the year.
The October survey caught the decision in the middle of survey week:
- The 60% of people surveyed before the announcement gave a reading of 86.9.
- The 40% surveyed after it gave 67.2. Westpac says a read that low has only been registered, for complete surveys, during the depths of the early 1990s recession.
- Just over 80% of those surveyed after the decision expect mortgage rates to rise again over the next 12 months, up from 63% in September.
- Pessimists outnumber optimists in 102 of the 106 groups Westpac tracks.
Flat White's 6 October 2026 edition added falling house prices to the list, with Sydney down almost 9% from its peak.
What does low consumer sentiment mean for jobs?
The survey's Unemployment Expectations Index rose 1.9% to 142.1 in October. A higher reading means more people expect unemployment to rise over the year ahead. The long-run average is 129, so the October reading sits well above it. Westpac describes consumers as "on edge".
Job loss fears are highest among people working in construction, hospitality, food services and transport, which Westpac calls cyclical and fuel-cost-exposed sectors.
Spending plans are weak too. The "time to buy a major household item" sub-index fell 7.1% to 83 in October, 40 points below its long-run average of 123.
Westpac's reading is that the worry for now is mostly prices and rates. In its words, "consumer concerns are still primarily about the cost-of-living and high interest rates than the more acute job and insolvency problems that arise during a recession."
The official jobs figures have moved in the same direction. The ABS Labour Force release of 24 September 2026 put unemployment at 4.6% in August, up 0.2 percentage points from July.
Where can you find the latest reading?
Westpac posts each month's result on Westpac IQ, with a full report that lists every sub-index against its long-run average.
From Flat White: What your industry isn't telling you about your pay
Sources
Every page below was read on 8 October 2026.
- Westpac IQ, Sentiment hit again by fuel and interest rate rises, 6 October 2026 (80.4, the forty worst reads, the before and after split, 102 of 106 groups, pump prices, the cash rate and mortgage rate points)
- Westpac-MI Consumer Sentiment October 2026, full report (PDF) (survey method and dates, unemployment expectations 142.1 and its average of 129, time to buy a major item 83 and its average of 123, mortgage rate expectations, the recession quote)
- Westpac IQ, Consumer sentiment sinks back to lows, 8 September 2026 (84.4 from 88.9, fuel and the July inflation figure, the five sub-indexes)
- Reserve Bank of Australia, Cash rate target (up 0.25 to 4.60%, effective 30 September 2026)
- Australian Bureau of Statistics, Labour Force, Australia, August 2026, released 24 September 2026 (unemployment 4.6%)
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