Forex
Home›Forex›Central Banks›Australian consumer sentiment ticks up after RBA holds…
Australian consumer sentiment ticks up after RBA holds rates
The Westpac-Melbourne Institute index rose 6% to 88.9 in August, but unemployment expectations moved back above the long-run average and 59% of respondents still expect further mortgage rate increases.
Australian consumer sentiment improved in August following the Reserve Bank of Australia decision to hold the cash rate, with the Westpac-Melbourne Institute Consumer Sentiment Index rising 6% to 88.9 from 83.9 in July, according to Forexlive.
However, the gain was narrow and largely mortgage-holder driven. The outlet said the improvement showed up in responses collected after the RBA's 11 August hold, while pre-decision responses were little changed from July, suggesting households did not experience a broad confidence rebound.
Forexlive also highlighted that pessimism still outweighs optimism, and that unemployment expectations rose back above the long-run average after last month's improvement. The survey results include that 59% of respondents still expect further mortgage rate increases, indicating many households have not materially repriced their rate outlook even as the central bank paused.
For the RBA, the report said the unemployment expectations reversal could be more consequential than the headline sentiment move because labour market deterioration expectations feed into how much further tightening the economy can absorb. It concluded sentiment may remain fragile into the next meeting given the index still sits well below year-ago levels.