Australia’s consumer sentiment falls for second straight month, survey shows

Consumer mood in Australia weakened in October, declining for a second successive month, as worries over household finances and uncertainty over future interest rate cuts dampened optimism.

The Westpac–Melbourne Institute sentiment index dropped 3.5 percent to 92.1, following a 3.1 percent fall in September. A reading below 100 indicates pessimists now outnumber optimists.

The decline was broad-based: the segment tracking family finances compared to a year ago slid 4.8 percent, while expectations for the next 12 months plunged 9.9 percent. The short-term economic outlook weakened by 2.5 percent, though the long-term five-year outlook nudged upward by 1.4 percent. The gauge of whether it was a good time to buy a major household item also eased 1.1 percent to 97.2, signaling that big spending plans could be put on hold.

Earlier in the year, sentiment had been recovering—buoyed by three rate cuts by the Reserve Bank of Australia (RBA) and easing inflationary pressures. But the RBA recently chose to hold its policy rate steady and flagged inflation has remained somewhat stubborn, casting doubt on further cuts.

Shoppers and retailers may feel the impact: with confidence in decline and spending intentions cooler, sectors depending on discretionary purchases could see a slowdown. The consumer outlook is now cautious as Australia maneuvers through inflation, interest rate balance, and household pressures.