Confidence Weak Following Hike But Within Recent Ranges

Westpac consumer confidence fell 2.6% in November to be down to 79.9, still higher than September, after +2.9% and 82. The drop is not surprising given the RBA hiked rates during the survey week but was the sharpest fall since May, when rates also rose following a pause. Households remain depressed but it is not uniform and sentiment has moving sideways through 2023.

• The survey was taken between November 6 and 10. Readings before the RBA’s November 7 meeting were around 1.5% higher on the month but afterwards they were down 6%. And consumers expect more with 73% of those surveyed after the decision believing there’ll be further hikes over the coming year up from 63% in October and 48% in September. Only 4% expect a rate cut.
• 40% are planning to spend less on Christmas this year compared with last, in line with November 2022’s response.
• The “time to buy a major household item” fell 1.4% and is very low but Westpac notes is 6% above September.
• While unemployment expectations rose 2.4% they continue to be around the series average and probably reflect jobs getting harder to find rather than layoffs.
• “Time to buy” a house fell 3.7% and remains very depressed, whereas consumers expect prices to continue to rise.

Source: MNI - Market News/Refinitiv