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Perth Now
2 days ago
- Business
- Perth Now
One thing keeping Aussies awake at night
Australians remain 'cautiously pessimistic' and aren't investing as the threats of US President Donald Trump's tariffs outweigh gains from falling interest rates and inflation. Consumer sentiment edged higher in early June according to the latest Westpac-Melbourne Institute index for the month of June, sitting at 92.6 compared to 92.1 last month. While this is a marginal improvement, sentiment around riskier assets remains low, with 55 per cent heavily favouring putting money in the bank or paying down debt. Just 10.2 per cent say real estate is the wisest investment option, while 9.7 per cent nominated shares. Westpac head of Australian macro-forecasting Matthew Hassan says consumers are waiting to see the fallout from the Trump tariffs. 'Indeed, responses to our quarterly question on the 'wisest place for savings' suggest that the tariff-related turmoil this year has seen what was already a high level of risk aversion intensify even further,' Mr Hassan said. Mr Hassan said more Australians are becoming aware about news on 'international conditions' and it is seen as a 'very clear negative'. 'News recall on this topic has risen to a three-year high with 77 per cent of consumers assessing the news as unfavourable – easily the most negative of the major news topics.' Westpac data also suggests it could be putting a handbrake on investing for years to come. Consumer confidence around the economy slipped slightly in the June quarter, while Australians are feeling more stressed about their jobs with the unemployment subindex rising by 5 per cent. Westpac also said expectations for the family finances over the next 12 months is down 1.9 per cent, while economic conditions over both the next 12 months and five years are predicted to slide. Overall consumers are in a cautiously pessimistic mood. NewsWire / John Appleyard Credit: News Corp Australia Mr Hassan said consumers overall were in a 'cautiously pessimistic' mood with these international events offsetting gains domestically. 'On the positive side, the RBA's May interest rate cut and moderating inflation are providing significant boosts, particularly around buyer attitudes towards major purchases,' he said. 'But against this, more sluggish growth reads domestically and the unsettled situation around global trade is continuing to weigh heavily on expectations.' One bright spot from the data showed more Australians think now is a good time to buy the family home, as the Reserve Bank of Australia's May rate cut and a slowing inflation rate provide a 'significant boost' towards buyers' feelings towards major purchases. The 'time to buy a dwelling' index rose 3.6 per cent to 93.3. While that marks the strongest reading since September 2021, pessimists still outnumber optimists with homebuyer sentiment still a long way below the historical average of 120. 'Despite this positive outlook for house prices, consumers remain relatively averse to real estate as an investment option and to risk in general,' Mr Hassan said.
West Australian
2 days ago
- Business
- West Australian
Australians are predicting a rough 12 months on the back of Trump's tariffs
Australians remain 'cautiously pessimistic' and aren't investing as the threats of US President Donald Trump's tariffs outweigh gains from falling interest rates and inflation. Consumer sentiment edged higher in early June according to the latest Westpac-Melbourne Institute index for the month of June, sitting at 92.6 compared to 92.1 last month. While this is a marginal improvement, sentiment around riskier assets remains low, with 55 per cent heavily favouring putting money in the bank or paying down debt. Just 10.2 per cent say real estate is the wisest investment option, while 9.7 per cent nominated shares. Westpac head of Australian macro-forecasting Matthew Hassan says consumers are waiting to see the fallout from the Trump tariffs. 'Indeed, responses to our quarterly question on the 'wisest place for savings' suggest that the tariff-related turmoil this year has seen what was already a high level of risk aversion intensify even further,' Mr Hassan said. Mr Hassan said more Australians are becoming aware about news on 'international conditions' and it is seen as a 'very clear negative'. 'News recall on this topic has risen to a three-year high with 77 per cent of consumers assessing the news as unfavourable – easily the most negative of the major news topics.' Westpac data also suggests it could be putting a handbrake on investing for years to come. Consumer confidence around the economy slipped slightly in the June quarter, while Australians are feeling more stressed about their jobs with the unemployment subindex rising by 5 per cent. Westpac also said expectations for the family finances over the next 12 months is down 1.9 per cent, while economic conditions over both the next 12 months and five years are predicted to slide. Mr Hassan said consumers overall were in a 'cautiously pessimistic' mood with these international events offsetting gains domestically. 'On the positive side, the RBA's May interest rate cut and moderating inflation are providing significant boosts, particularly around buyer attitudes towards major purchases,' he said. 'But against this, more sluggish growth reads domestically and the unsettled situation around global trade is continuing to weigh heavily on expectations.' One bright spot from the data showed more Australians think now is a good time to buy the family home, as the Reserve Bank of Australia's May rate cut and a slowing inflation rate provide a 'significant boost' towards buyers' feelings towards major purchases. The 'time to buy a dwelling' index rose 3.6 per cent to 93.3. While that marks the strongest reading since September 2021, pessimists still outnumber optimists with homebuyer sentiment still a long way below the historical average of 120. 'Despite this positive outlook for house prices, consumers remain relatively averse to real estate as an investment option and to risk in general,' Mr Hassan said.
The Advertiser
13-05-2025
- Business
- The Advertiser
Consumers in crossfire despite US-China trade war truce
Consumer confidence is improving, but Australians have been urged to temper their expectations after the treasurer noted the limits of a US-China trade truce. Both nations have agreed to a 90-day tariff reduction, with the United States committing to dropping 145 per cent levies on China to 30 per cent and Beijing lowering its 125 per cent duties on American imports to 10 per cent. Treasurer Jim Chalmers welcomed the development but noted many issues remained unresolved. "Australia has got a lot to lose from a trade war between the US and China in particular, so we want to see these trade tensions de-escalated permanently, not temporarily," he told ABC Radio on Tuesday. "There's a lot of uncertainty, unpredictability, and volatility in the global economy." However, consumer sentiment rebounded in May as markets recovered from the US 'Liberation Day' tariff announcement in April, according to the Westpac-Melbourne Institute index published on Tuesday. "Consumer sentiment has recovered just over a third of last month's tariff-related fall, buoyed by a rebound in financial markets and a clear-cut federal election result," Westpac chief economist Matthew Hassan said. The index rose 2.2 per cent in May to 92.1 points, from 90.1 in April. "That said, the index is still 3.9 per cent below its March level and in 'firmly pessimistic' territory overall," Mr Hassan said. Treasury Secretary Steven Kennedy briefed Dr Chalmers on May 4 - the morning after Labor's election victory - telling him that the global economy had deteriorated since President Donald Trump began his punitive tariffs regime on US trading partners in March. He told the treasurer that while Australia had fairly strong economic fundamentals, it would not be immune from the trade conflict. Australia was well-placed and well-prepared to deal with the fallout, Dr Chalmers said, but he acknowledged "we do have a lot of skin in the game". "We welcome the announcement ... but we're not getting carried away," he said. The US has imposed a 10 per cent baseline tariff on many Australian imported goods, as well as a 25 per cent tariff on steel and aluminium. While the treasurer has not had contact with US Treasury Secretary Scott Bessent since the election, Dr Chalmers said there would be opportunities to engage with his counterpart. Dr Chalmers also said Australia was entering "a period of global dislocation not seen since World War II". "Our people are still under pressure and the headwinds in the global economy are picking up at a rate of knots," he said. Wages and labour force data to be released this week might guide the Reserve Bank of Australia's next interest rate decision on May 20. Economists widely predict the RBA will shave another 0.25 per cent off the cash rate after announcing its first cut in more than four years in February. Data released on April 30 revealed Australia's headline inflation was at 2.4 per cent in the year to March, down from as high as 7.8 per cent in December 2022. Dr Chalmers has often referred to Australia's "soft landing" from those heights, pointing to the increased real wages and low unemployment achieved simultaneously to lowering inflation. "This is an enviable position for our economy to be in - unique when we look around the world and compare ourselves to history, and defying the economic orthodoxy," he said. "We know the job isn't finished and we know we will be faced with more global economic volatility and unpredictability over the next three years, not less." Consumer confidence is improving, but Australians have been urged to temper their expectations after the treasurer noted the limits of a US-China trade truce. Both nations have agreed to a 90-day tariff reduction, with the United States committing to dropping 145 per cent levies on China to 30 per cent and Beijing lowering its 125 per cent duties on American imports to 10 per cent. Treasurer Jim Chalmers welcomed the development but noted many issues remained unresolved. "Australia has got a lot to lose from a trade war between the US and China in particular, so we want to see these trade tensions de-escalated permanently, not temporarily," he told ABC Radio on Tuesday. "There's a lot of uncertainty, unpredictability, and volatility in the global economy." However, consumer sentiment rebounded in May as markets recovered from the US 'Liberation Day' tariff announcement in April, according to the Westpac-Melbourne Institute index published on Tuesday. "Consumer sentiment has recovered just over a third of last month's tariff-related fall, buoyed by a rebound in financial markets and a clear-cut federal election result," Westpac chief economist Matthew Hassan said. The index rose 2.2 per cent in May to 92.1 points, from 90.1 in April. "That said, the index is still 3.9 per cent below its March level and in 'firmly pessimistic' territory overall," Mr Hassan said. Treasury Secretary Steven Kennedy briefed Dr Chalmers on May 4 - the morning after Labor's election victory - telling him that the global economy had deteriorated since President Donald Trump began his punitive tariffs regime on US trading partners in March. He told the treasurer that while Australia had fairly strong economic fundamentals, it would not be immune from the trade conflict. Australia was well-placed and well-prepared to deal with the fallout, Dr Chalmers said, but he acknowledged "we do have a lot of skin in the game". "We welcome the announcement ... but we're not getting carried away," he said. The US has imposed a 10 per cent baseline tariff on many Australian imported goods, as well as a 25 per cent tariff on steel and aluminium. While the treasurer has not had contact with US Treasury Secretary Scott Bessent since the election, Dr Chalmers said there would be opportunities to engage with his counterpart. Dr Chalmers also said Australia was entering "a period of global dislocation not seen since World War II". "Our people are still under pressure and the headwinds in the global economy are picking up at a rate of knots," he said. Wages and labour force data to be released this week might guide the Reserve Bank of Australia's next interest rate decision on May 20. Economists widely predict the RBA will shave another 0.25 per cent off the cash rate after announcing its first cut in more than four years in February. Data released on April 30 revealed Australia's headline inflation was at 2.4 per cent in the year to March, down from as high as 7.8 per cent in December 2022. Dr Chalmers has often referred to Australia's "soft landing" from those heights, pointing to the increased real wages and low unemployment achieved simultaneously to lowering inflation. "This is an enviable position for our economy to be in - unique when we look around the world and compare ourselves to history, and defying the economic orthodoxy," he said. "We know the job isn't finished and we know we will be faced with more global economic volatility and unpredictability over the next three years, not less." Consumer confidence is improving, but Australians have been urged to temper their expectations after the treasurer noted the limits of a US-China trade truce. Both nations have agreed to a 90-day tariff reduction, with the United States committing to dropping 145 per cent levies on China to 30 per cent and Beijing lowering its 125 per cent duties on American imports to 10 per cent. Treasurer Jim Chalmers welcomed the development but noted many issues remained unresolved. "Australia has got a lot to lose from a trade war between the US and China in particular, so we want to see these trade tensions de-escalated permanently, not temporarily," he told ABC Radio on Tuesday. "There's a lot of uncertainty, unpredictability, and volatility in the global economy." However, consumer sentiment rebounded in May as markets recovered from the US 'Liberation Day' tariff announcement in April, according to the Westpac-Melbourne Institute index published on Tuesday. "Consumer sentiment has recovered just over a third of last month's tariff-related fall, buoyed by a rebound in financial markets and a clear-cut federal election result," Westpac chief economist Matthew Hassan said. The index rose 2.2 per cent in May to 92.1 points, from 90.1 in April. "That said, the index is still 3.9 per cent below its March level and in 'firmly pessimistic' territory overall," Mr Hassan said. Treasury Secretary Steven Kennedy briefed Dr Chalmers on May 4 - the morning after Labor's election victory - telling him that the global economy had deteriorated since President Donald Trump began his punitive tariffs regime on US trading partners in March. He told the treasurer that while Australia had fairly strong economic fundamentals, it would not be immune from the trade conflict. Australia was well-placed and well-prepared to deal with the fallout, Dr Chalmers said, but he acknowledged "we do have a lot of skin in the game". "We welcome the announcement ... but we're not getting carried away," he said. The US has imposed a 10 per cent baseline tariff on many Australian imported goods, as well as a 25 per cent tariff on steel and aluminium. While the treasurer has not had contact with US Treasury Secretary Scott Bessent since the election, Dr Chalmers said there would be opportunities to engage with his counterpart. Dr Chalmers also said Australia was entering "a period of global dislocation not seen since World War II". "Our people are still under pressure and the headwinds in the global economy are picking up at a rate of knots," he said. Wages and labour force data to be released this week might guide the Reserve Bank of Australia's next interest rate decision on May 20. Economists widely predict the RBA will shave another 0.25 per cent off the cash rate after announcing its first cut in more than four years in February. Data released on April 30 revealed Australia's headline inflation was at 2.4 per cent in the year to March, down from as high as 7.8 per cent in December 2022. Dr Chalmers has often referred to Australia's "soft landing" from those heights, pointing to the increased real wages and low unemployment achieved simultaneously to lowering inflation. "This is an enviable position for our economy to be in - unique when we look around the world and compare ourselves to history, and defying the economic orthodoxy," he said. "We know the job isn't finished and we know we will be faced with more global economic volatility and unpredictability over the next three years, not less." Consumer confidence is improving, but Australians have been urged to temper their expectations after the treasurer noted the limits of a US-China trade truce. Both nations have agreed to a 90-day tariff reduction, with the United States committing to dropping 145 per cent levies on China to 30 per cent and Beijing lowering its 125 per cent duties on American imports to 10 per cent. Treasurer Jim Chalmers welcomed the development but noted many issues remained unresolved. "Australia has got a lot to lose from a trade war between the US and China in particular, so we want to see these trade tensions de-escalated permanently, not temporarily," he told ABC Radio on Tuesday. "There's a lot of uncertainty, unpredictability, and volatility in the global economy." However, consumer sentiment rebounded in May as markets recovered from the US 'Liberation Day' tariff announcement in April, according to the Westpac-Melbourne Institute index published on Tuesday. "Consumer sentiment has recovered just over a third of last month's tariff-related fall, buoyed by a rebound in financial markets and a clear-cut federal election result," Westpac chief economist Matthew Hassan said. The index rose 2.2 per cent in May to 92.1 points, from 90.1 in April. "That said, the index is still 3.9 per cent below its March level and in 'firmly pessimistic' territory overall," Mr Hassan said. Treasury Secretary Steven Kennedy briefed Dr Chalmers on May 4 - the morning after Labor's election victory - telling him that the global economy had deteriorated since President Donald Trump began his punitive tariffs regime on US trading partners in March. He told the treasurer that while Australia had fairly strong economic fundamentals, it would not be immune from the trade conflict. Australia was well-placed and well-prepared to deal with the fallout, Dr Chalmers said, but he acknowledged "we do have a lot of skin in the game". "We welcome the announcement ... but we're not getting carried away," he said. The US has imposed a 10 per cent baseline tariff on many Australian imported goods, as well as a 25 per cent tariff on steel and aluminium. While the treasurer has not had contact with US Treasury Secretary Scott Bessent since the election, Dr Chalmers said there would be opportunities to engage with his counterpart. Dr Chalmers also said Australia was entering "a period of global dislocation not seen since World War II". "Our people are still under pressure and the headwinds in the global economy are picking up at a rate of knots," he said. Wages and labour force data to be released this week might guide the Reserve Bank of Australia's next interest rate decision on May 20. Economists widely predict the RBA will shave another 0.25 per cent off the cash rate after announcing its first cut in more than four years in February. Data released on April 30 revealed Australia's headline inflation was at 2.4 per cent in the year to March, down from as high as 7.8 per cent in December 2022. Dr Chalmers has often referred to Australia's "soft landing" from those heights, pointing to the increased real wages and low unemployment achieved simultaneously to lowering inflation. "This is an enviable position for our economy to be in - unique when we look around the world and compare ourselves to history, and defying the economic orthodoxy," he said. "We know the job isn't finished and we know we will be faced with more global economic volatility and unpredictability over the next three years, not less."
Yahoo
13-05-2025
- Business
- Yahoo
Australia consumer sentiment recovers partially from tariff blow
SYDNEY (Reuters) -A measure of Australian consumer sentiment partially rebounded in May as the initial shock of U.S. President Donald Trump's tariff war faded a little, an improvement that should be underpinned by the latest truce with China. A Westpac-Melbourne Institute survey showed on Tuesday its main index of consumer sentiment bounced 2.2% in May, retracing some of the 6.0% dive suffered in April when Trump first announced his "reciprocal" tariffs. The index was 12% higher than a year earlier at 92.1, though that meant pessimists still outnumbered optimists. Matthew Hassan, Westpac's head of Australian macro-forecasting, said overall sentiment got a modest boost from the clear victory of the Labor government in a national election on May 3. Sentiment among Labor voters jumped 4.5% to a high 109.6, while confidence among supporters of the Liberal National opposition fell 0.7% to 85.5. The survey found respondents were more upbeat about their personal finances, which climbed 7.8%, while the economic outlook for the year ahead rose 2.8%. The index on whether it was a good time to buy a major household item also climbed 3.5%, leaving it almost 22% higher than a year earlier. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
11-03-2025
- Business
- Yahoo
Consumer confidence surges on back of interest rate cut
The Reserve Bank's first rate cut since 2020 has delivered a welcome boost to the economic outlook, but Australian consumers are still more pessimistic than optimistic. The Westpac-Melbourne Institute consumer confidence survey posted a strong four per cent gain in March, up to a three-year high of 95.9. Slowing inflation and good news on interest rates drove the bounce in sentiment following a slowdown in recovery over the Christmas-New Year period, said Westpac's head of Australian macro-forecasting, Matthew Hassan. "The RBA's decision to cut interest rates in February and a further easing in cost-of-living pressures have provided a clear lift," Mr Hassan said on Tuesday. "The survey detail shows a broad-based improvement with a notable rise in confidence around the labour market outlook." Mortgage holders recorded the largest jump in confidence, while the outlook also improved for people planning to buy a home. Expectations of the time it takes to buy a dwelling eased, although expectations that house prices would rise also grew. It came as the Australian Bureau of Statistics revealed the value of Australian homes rose to a fresh record high, although the rate of growth was slowing. The value of Australia's 11.3 million residential dwellings rose 0.2 per cent to $11 trillion in the December quarter, despite a short slowdown in the housing market. "The relatively flat growth for the December quarter was the result of net additions to stock offsetting a slight fall in property prices," said ABS head of finance statistics Mish Tan. "Annually, growth slowed to 4.4 per cent from 8.1 per cent in December quarter 2023." View this post on Instagram A post shared by Australian Bureau of Statistics (@absstats) Another four per cent improvement in April would bring the Westpac-Melbourne Institute consumer sentiment index back to 100, which would denote an equal amount of optimists as pessimists. But concerns still persist, most notably in the form of unsettling news from overseas. "While it is not the most pressing concern, the US 'tariff war' and deteriorating relations with some of its allies is clearly unsettling," Mr Hassan said. Ex-tropical cyclone Alfred is also weighing on the mood of some consumers. Brisbane defied the rising national trend to record a 1.7 per cent decline in sentiment. Meanwhile, business confidence declined into negative territory in February, according to NAB's business survey. That came despite a boost in profitability and trading. Conditions improved the strongest in mining and construction, while the wholesale, manufacturing, finance, property and retail industries suffered a decline. "Activity measures in the survey continue to point to below average growth," said NAB chief economist Alan Oster. "Cost pressures are a step above output price growth pointing to the ongoing challenges in the business sector even though economic activity showed some improvement in H2 2024."
