Australia: Consumer sentiment dips on weak national accounts but remains in optimistic territory in June
The Westpac-Melbourne Institute consumer sentiment index dipped to 100.7 in June from 101.3 in May. Therefore, it remained above the 100-point mark that separates optimism from pessimism among consumers.
June’s decline was most likely due to the publication of weak national accounts for Q1, which was seemingly behind the sizable drop in consumers’ expectations on the general economic situation in the year ahead, as well as of worse assessments of their family finance compared to a year ago. Mounting concerns regarding future job losses also appear to have been influenced by the first quarter’s subdued economic performance. That said, consumers’ expectations on their finances in the next 12 months improved, probably thanks to income tax cuts coming through and as the Reserve Bank of Australia (RBA) decided to cut rates in June. The RBA’s decision was also behind the surge in house prices expectations and the increased willingness to buy a dwelling seen in June.