Australian Consumer Sentiment Reaches Two-Year High

Investing.com — Australian consumer sentiment hit an over two-year high in early October, as indicated by a private survey released on Tuesday. This rise in confidence comes amid growing reassurance that local interest rates will not increase further.

The Westpac-Melbourne Institute consumer sentiment index rose by 6.2% to 89.8 in October, marking its strongest level since early 2022.

Despite a generally pessimistic outlook, consumer sentiment was uplifted by interest rate cuts abroad and signals from the Reserve Bank of Australia that local rates would not rise.

Nevertheless, concerns over persistent inflation and a tight housing market continue to weigh on consumers, as noted by Westpac.

Tuesday's reading reflects significant improvement in sentiment following previous concerns centered on inflation and high interest rates that had driven sentiment to historic lows.

Additionally, a strong labor market has surfaced as one of the few supportive factors for consumer sentiment.

Westpac anticipates that the Reserve Bank of Australia will maintain unchanged interest rates for the remainder of the year, and likely soften its hawkish messaging in the months ahead.