Australia August consumer sentiment boosted by rate cuts
A Westpac-Melbourne Institute survey showed its main index of consumer sentiment climbed 5.7% in July to 98.5, the highest reading since early 2022. The reading under 100 means pessimists still outnumber optimists, though only just.
The pick-up came after the Reserve Bank of Australia cut interest rates a quarter point to 3.60% and left the door open to further easing this year.
"That looks to have reinforced consumer expectations that mortgage interest rates are headed lower, giving a broad-based boost to sentiment," said Matthew Hassan, Westpac's head of Australian macro-forecasting.
The improvement was broad based across the survey's measures of confidence, with the index of the economic outlook for the next year jumping 7.6% while that for five years rose 5.4%.
Family finances compared to a year ago bounced 6.2%, and the outlook for the next 12 months picked up by 5.4%.
In a promising note for retailers, the index of whether it was a good time to buy a major household item gained 4.2%.
The survey's measure of whether it was a good time to buy a dwelling climbed 10.5% to a four-year high of 97.8, though that remains below the long-run average of 120 due to affordability constraints.
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