Consumer sentiment lower in January: Westpac survey
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The news: Consumer sentiment slipped further in January but the mood is less pessimistic than a year ago, according to a survey by Westpac and The Melbourne Institute.
The numbers: The monthly Westpac Melbourne Institute Consumer Sentiment Index dropped 0.7% to 92.1 in January from 92.8 in December. The reading remains below the ‘neutral’ level of 100, meaning pessimists outnumbered optimists.
The context: The survey found results were weaker later in the survey period compared to the first two days. While there was no obvious geopolitical event driving the result, the ongoing unsettled global backdrop, along with news about the depreciation of the Australian dollar against the US dollar likely affected the outlook.
Consumers’ assessment of their finances compared with a year ago reversed gains in December, falling 7.8% in the month. Forward-looking measures were more stable, as was consumers’ assessment of whether now is a good ‘time to buy a major household item’.
Expectations about family finances over the next 12 months reversed last month’s decline, while confidence around the outlook for the economy in the coming year was unchanged.
What they said: “The consumer mood has soured for two months in a row and remains on the pessimistic side… However, sentiment is still less negative than a year ago and some components suggest that consumers expect things to continue to improve from here,” Westpac's chief economist Luci Ellis said.
