AUSTRALIA DATA: Consumer Confidence Rises To Highest Since Rate Hikes Began

Westpac consumer confidence for October rose 6.2% m/m to 89.8, the highest level since May 2022 when RBA tightening began, but it remains pessimistic. The improvement was driven by a better economic outlook helped by falling rate hike expectations and easing price pressures. Westpac expects the RBA to soften its tone in the November 5 statement. 

• The Westpac-Melbourne Institute mortgage rate expectations index fell 14.1% in October and is now at its lowest since Covid when rates were cut. “Just over half of consumers” believe that rates will be steady or down over the year ahead up from around a quarter 3 months ago. The RBA last hiked in November last year and the survey showed that stable mortgage rates are supporting households.
• The “economic outlook, next 12 months” rose 14.3% and is now moderately above its historical average. As a result, unemployment expectations fell 6.2% m/m to their average.
• Family finances improved modestly as cost-of-living pressures are only gradually easing. Compared to a year ago they have improved 16.8% since May but are still well into negative territory implying that fiscal measures are only having a moderate impact. The outlook though is more positive with the index close to the neutral 100-mark.
• The “time to buy a major household item” increased 3% m/m but is still significantly below the average signalling continued soft consumer expenditure.
• Home buyers remain pessimistic as affordability is very weak but the “time to buy a dwelling” improved 2.5% m/m helped by government first-time buyer assistance. Price expectations increased 1.8% m/m.

Australia Westpac consumer confidence