SYDNEY, Dec 16 (Reuters) – Australia’s consumer sentiment slid in December after turning positive for the first time in four years the previous month, as households grappled with renewed angst over inflation and the interest rate outlook, a private survey showed on Tuesday.
A Westpac-Melbourne Institute survey showed its main index of consumer sentiment fell 9% to 94.5 in December, after surging 12.8% the month before. The reading dropped back below 100, suggesting pessimists outnumbered optimists.
“Since the last news recall update, consumers have confronted an upside surprise on Q3 inflation figures and another strong read from the debut of the full monthly CPI for October,” said Ryan Wells, a Westpac economist.
Wells added that the responses over the survey week, during which the Reserve Bank of Australia held interest rates steady at 3.6% and warned rate cuts are now over, showed little difference between those surveyed before and after the RBA decision.
“This suggests that the Bank’s decision and subsequent communications did not come as a significant surprise to consumers, with expectations having already been baked in prior to the announcement,” he added.
KEY DETAILS
• The breakdown of the survey showed the outlook for family finances over the next year fell 6.1% to 102.4.
• The survey’s measure of the economic outlook for the next 12 months dropped 9.7%, while the outlook for the next five years slid 11.7%.
• The measure of whether it was a good time to buy a major household item fell 11.4% to 98.9.
(Reporting by Stella Qiu; Editing by Chris Reese and Shri Navaratnam)
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