Australian consumers downbeat in Sept amid economic worries

SYDNEY (Reuters) – Australian consumer sentiment stayed downbeat in September as concerns over the economy and jobs bubbled to the surface even as worries over higher interest rates eased, a survey showed on Tuesday.

The Westpac-Melbourne Institute index of consumer sentiment dipped 0.4% in September from August, when it bounced 2.8%. The index reading of 84.6 showed pessimists still far outnumbered optimists.

“The pessimism that has dominated for over two years now is still showing no real signs of lifting,” said Westpac Senior Economist Matthew Hassan.

“While cost-of-living pressures are becoming a little less intense and fears of further interest rate rises have eased, consumers are becoming more concerned about where the economy may be headed and what this could mean for jobs.”

The Reserve Bank of Australia (RBA) is considered unlikely to raise rates again, though neither is it in any rush to cut. It has repeatedly said an easing this year was not on the cards.

Wide-scale income tax cuts also came into effect in July, delivering some relief to household budgets.

The survey’s measure of family finances compared to a year ago rose 1.2% in September, while finances for the next 12 months ticked up 0.2%.

However, that was offset by a 2.6% drop in the index measuring the economic outlook for the next 12 months, while the outlook for the next five years fell 1.0%. Respondents were also more concerned about losing their jobs.

Data out last week showed the economy barely grew in the June quarter, while annual growth was the slowest since the pandemic.

In a sign tax cuts were not feeding through into spending, the survey’s “time to buy a major household item” index held at 82.6 in September, well below its long-run average of 124.2.