Consumer confidence in Australia escalated substantially in November as households began to look on the positive side of the economy. Sources indicated that this boost will likely reduce the likelihood of an interest rate cut soon.
The announcement followed Westpac Banking Corp.’s release of its survey findings, which highlighted a 12.8% surge in sentiment to 103.8 points. The increase illustrated a significant shift in the market, with more optimists than pessimists.
This change marked the first time since February 2022, when 100 was the threshold, ending a streak of 44 months during which Australian consumers felt negative emotions.
“This is an amazing and somewhat unexpected outcome. November is the first month in nearly four years where consumer sentiment is ‘net positive,’” explained Matthew Hassan, who leads Australian macro forecasting at Westpac.
Australia’s consumer confidence rises despite escalating worries about the job market
Hassan acknowledged that there were clear signs that the recovery is gaining momentum, particularly in the housing market and consumer demand. According to him, the most amazing fact is how these positive factors have counteracted renewed concerns about interest rates and inflation.
His remarks followed the Reserve Bank’s recent decision to maintain borrowing costs unchanged at 3.6%. When reporters asked the central bank to clarify the reason behind this decision, the bank pointed out ongoing concerns about low unemployment and inflation.
With this argument in mind, the Governor of the Reserve Bank of Australia, Michele Bullock, expressed the unlikelihood of an additional interest rate reduction soon, following the three rate cuts this year.
Meanwhile, the positive economic outlook stems from a substantial improvement in how households perceive their financial situation. Following this economic optimism, the sub-index for family finances 2026 surged by 12.3%, reaching a score of 109.1.
On the other hand, Westpac noted that this increase occurred despite a small decline of approximately 0.3% in mortgage expectations from households.
Still, individuals have expressed concerns about the job market, despite being optimistic about the economy and their family finances.
This was after the Westpac–Melbourne Institute Unemployment Expectations Index escalated by 9.3% in November, reaching 139.5. Notably, a larger number on this index indicates that more people believe unemployment will increase significantly in the coming year.
Australian consumer confidence in their finance surged amid a third interest rate cut
According to the Westpac-Melbourne Institute survey, a measure of how Australians feel about their finances jumped in August thanks to the third interest rate cut this year, which boosted sentiment about money and the economy.
The Survey pointed out that its index on consumer sentiment jumped 5.7% in July to 98.5, marking the highest level since early 2022. However, this number was below 100, indicating that there are still more pessimists than optimists, but only slightly.
This boost was led by the Reserve Bank of Australia’s quarter-point cut in interest rates to 3.60%, accompanied by a possible further cut later this year. Hassan commented, “This seems to have strengthened consumer expectations that mortgage rates will decrease, providing a broad lift in sentiment.”
In the meantime, it is worth noting that the survey demonstrated an overall improvement in confidence across various areas. A measure of economic outlook for the next year surged by 7.6%, and a five-year outlook rose by 5.4%.
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Source: https://www.cryptopolitan.com/australia-consumer-confidence-surges/
