Australia Consumer Confidence Deteriorates In December

Australia's consumer confidence weakened at the end of the year with renewed concerns about the economic outlook, survey data from Westpac showed on Tuesday. The Westpac-Melbourne Institute consumer confidence index fell to 92.8 in December from 94.6 in November.

Among five sub-indices of consumer confidence, two indices track current conditions and three track expectations. All of the weakening in December was in forward looking components.

The 'economic outlook, next 12 months' sub-index dropped 9.6 percent to 91.2 and the 'economic outlook, next 5 years' sub-index declined 7.9 percent to 95.9.

Meanwhile, the 'family finances vs. a year ago' sub-index rose a further 6.9 percent to 84.2. While pessimists still outnumber optimists, the gap is at its narrowest since the start of 2022.

At 103.2, the 'family finances, next 12 months' sub-index stayed above the 100-mark, indicating that optimists outnumber pessimists. However, this was down 0.9 percent from a month ago.

The 'time to buy a major household item' sub-index registered a significant improvement in December, rising 4.8 percent to 89.2, to hit a two-and-a-half year high.

Concerns about economic outlook weighed on sentiment around jobs. The Westpac- Melbourne Institute Unemployment Expectations Index advanced 2.7 percent to 123.7 in December.

The 'time to buy a dwelling' index fell 6 percent to 81.6 in December. The survey showed that there is higher-than-normal degree of uncertainty about the outlook for housing.

The Westpac-Melbourne Institute Index of House Price Expectations fell 5.3 percent to 142 in December, the lowest reading since April 2023.

The Reserve Bank Board next meets on February 17 and 18. Westpac economist Matthew Hassan said the board is likely to require further evidence of the desired slowing in inflation before it is prepared to relax policy.

Westpac expects the Board to leave interest rates unchanged at its February meeting, with an easing expected to commence in May.

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