Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

Australian Consumer Sentiment Plummets Amid Surging Inflation

Economic Indicators Aug 09, 2022 09:38
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.
 
WBC
+4.03%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Ambar Warrick 

Investing.com-- A gauge of Australian consumer sentiment stayed negative for a ninth consecutive month in August as rising inflation and interest rates, coupled with a dour outlook on living costs dented sentiment towards the economy.

A survey conducted by Westpac Banking Corp (ASX:WBC) showed its consumer sentiment index fell 3% in August to lows last seen during the COVID pandemic in 2020. Inflation appears to be the biggest contributor to this downtrend.

The reading comes less than a week after the Australian central bank hiked interest rates, and said it would continue to do so, predicting elevated inflation levels this year. The bank is expected to raise rates by at least 50 basis points during its September meeting.

Australia is grappling with a spike in consumer price index inflation this year, with June’s reading coming in at 6.1%- its highest level since 2001. The inflation rate has nearly doubled this year.  

The rising cost of fuel and food is the biggest contributor to inflation, and has severely dented consumer sentiment. As a result, participants in the Westpac survey were more uncertain over spending big on major household appliances. 

"It is ominous that the pace of these price increases has been increasing rapidly," wrote Bill Evans, Chief Economist at Westpac. 

The housing market is also steadily deteriorating, with only a small number of respondents saying that it is a good “time to buy a dwelling.” Participants holding a mortgage were especially dissuaded by the Reserve Bank’s recent rate hike, Westpac said, while sentiment among renters improved slightly. 

On the other hand, sentiment towards Australia’s labor market remained underpinned, which in turn is keeping household spending steady. 

"A vibrant jobs market along with solid household balance sheets are important explanations for the current resilient household spending despite deteriorating confidence," Evans wrote. 

Separately, a survey by National Australia Bank) showed that business confidence improved slightly in August. 

 

Australian Consumer Sentiment Plummets Amid Surging Inflation
 

Related Articles

Turkish Inflation Rate Rises to Highest Since 1998
Turkish Inflation Rate Rises to Highest Since 1998 By Investing.com - Oct 03, 2022

By Scott Kanowsky  Investing.com -- The rate of inflation in Turkey rose to its highest mark since 1998 in September, according to data from the Turkish Statistical Institute,...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email