Australia consumer sentiment weakens in March- Westpac

Investing.com-- Australian consumer sentiment weakened slightly in March, a private survey showed on Tuesday, as respondents remained largely pessimistic over Australia’s economic outlook and continued pressure on household finances. 

The Westpac Melbourne Institute Consumer Sentiment Index fell 1.8% in March to 84.4 points, compared to a rise of 6.2% in the prior month.

While there were some improvements, consumers remained negative over the economic outlook for the year, as well as changes to the government’s budget and planned tax cuts. 

“For consumers, the inflation and cost-of-living crisis may be becoming less acute but it will likely remain the dominant concern for some time yet,” Westpac analysts said in a note. 

Tuesday’s reading came even as the Reserve Bank of Australia tempered its hawkish stance during a recent meeting. The central bank changed some of its messaging and no longer warned it would raise interest rates further. 

But Wesptac said that consumers may have been hoping for a more optimistic message on interest rates and inflation, and that sentiment had logged a sharp swing after the RBA meeting last week. 

Rising interest rates have been a key point of contention for Australian consumers, given that they push up mortgage rates and chew into household finances. 

Australia’s job market remained a point of optimism for consumers. Data for February showed an outsized surge in the number of employed people, signaling that the labor sector remained strong.