Australian consumer sentiment fell to its lowest point in four years in November, with the Westpac-Melbourne Institute index dropping 2.7% to 78.2 as households brace for further interest rate increases.
The decline extends a sharp downward trend, following falls of 4.7% in October and 5.2% in September, Reuters reported. The index now sits almost 25% below its level a year earlier.
Pessimists outnumber optimists by a substantial margin in the November survey. A sub-index measuring the 12-month economic outlook fell 10.2%.
Matthew Hassan, who leads Australian macro-forecasting at Westpac, said consumers are expecting further rate rises. He described consumer pessimism as deep and said sentiment has been reaching extreme lows. The survey is a monthly measure of household confidence, with readings below 100 indicating pessimists outnumber optimists.
Earlier coverage noted that for respondents surveyed after the RBA's rate decision on 29 September, the October index dropped to 67.2%, the lowest since the late 1990s. Household pessimism had been sustained for the longest period since the early-1990s recession, based on comments from Hassan in October.
Australian households are confronting rising interest rates alongside existing cost-of-living pressures, with the RBA having raised rates five times in the current year to 4.85%. Those with mortgages or household spending commitments face an 18-year high cash rate, and the survey data suggest conditions for purchasing major household items have worsened further.
Reporting: Reuters
Background: The Guardian, Yahoo Finance
Written by Pick & Scroll News from the reporting and documents linked above.
