Australia: Consumer confidence plunges in December
December 13, 2011
In December, the index of consumer sentiment, published by Westpac and the Melbourne Institute, dropped to 94.7 points, which was 8.7 points below the 103.4 points recorded in November and marked the first deterioration after three consecutive month of improving sentiment. As a result of the drop, which was the largest since October 2008, the index dipped below the long-term average of 100 points and is now at its lowest level since August this year. According to Westpac and the Melbourne Institute, the increase in the unemployment rate, together with the ?the constant stream of news on developments in Europe? and the turbulence in the international financial markets, contributed to the dismal December result. Most sub-components of the index dropped compared to the previous month. The sharpest deterioration was experienced by the component related to expectations about the economic situation in the next 12 months. Furthermore, although households' expectations regarding their future personal financial situation improved, consumers' evaluation of their current financial situation deteriorated markedly, leading to a 3.0% decline in intentions to purchase a major household item.
Author: Armando Ciccarelli, Head of Data Solutions