Pessimistic consumers now outweigh optimists, says Westpac, Melbourne Institute – The Australian Financial Review

All index components fell for January 2019, with “the biggest falls around expectations for the economy and assessments of current finances,” said Westpac senior economist Matthew Hasssan.

Mr Ticehurst thought this was “a little unusual to see”.

The Reserve Bank plays closest attention to the family finance versus a year ago index said Westpac’s Mr Hassan. He said this index related most closely to actual spending.

It is a measure of how optimistic a consumer is with their financial position now, compared to two months ago and fell 5.9 per cent to 84.6 points.

“That has been the achilles heel if you like, it has been weak persistently over the last few years,” said Mr Hassan.

Surveyed consumers were concerned about future economic conditions, with sentiment about the 12 month outlook falling 7.8 per cent, the biggest fall since September 2015.

Sentiment about the five-year outlook fell 5.9 per cent. Both these sub indexes remain above their long run averages but have fallen below 100, suggesting there are more pessimists than optimists about Australia’s economic future.

Sentiment on whether now was a good time to buy a major household item fell 1.3 per cent, to 118.3 points.

Retail trade figures for November 2018 were released late last week by the Australian Bureau of Statistics, beating consensus among economists.

Seasonally adjusted retail sales grew 0.4 per cent for November 2018, economists had predicted 0.3 per cent growth.

This was an increase from 0.3 per cent growth for October 2018.

Autralia economy news

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