Overview
- The Westpac–Melbourne Institute consumer sentiment index rose 6% to 88.9 in August, which is still well below the 100 neutral mark and lower than readings a year ago.
- Most of the improvement came from responses collected after the Reserve Bank held the cash rate on 11 August, and gains were concentrated among people with mortgages rather than a broad lift across all households.
- A majority of respondents, 59%, still expect further mortgage rate increases, and RBA governor Michele Bullock said the board had discussed a hike even as it left the cash rate at 4.35%.
- Unemployment expectations moved back above their long-run average and house-price expectations softened, while questions about current conditions improved more than forward-looking measures.
- With inflation and cost-of-living pressure weighing on households, the survey suggests sentiment could remain fragile and sensitive to incoming labour and inflation data before the RBA meets on September 28–29.