Consumer sentiment remains in deeply pessimistic territory, falling to lows seen during the depth of the pandemic and the GFC.
According to Westpac’s index, consumer sentiment dropped 0.9 per cent to 83.7 in October, nearing historic lows
Westpac chief economist Bill Evans said sentiment “remains in deeply pessimistic territory at a level comparable to the lows briefly reached during the pandemic and the extended weakness experienced during the Global Financial Crisis.
“The key drags on confidence continue to come from a surge in the cost of living, rising interest rates, and concerns about the near- term outlook for the economy.”
Evans points out that the results could have been “significantly worse” if the RBA had hiked the cash rate by 50 basis points rather than 25.
The survey of 1200 respondents was conducted over the four days from October 3 to October 6, with the RBA’s cash rate decision delivered at 2:30pm on October 4.
“There were 476 interviews on October 3, which are counted as ‘preRBA’ with the remaining 724 counted as ‘post RBA’,” Evans explains.
“Sentiment amongst those sampled before the RBA decision showed a depressing 77.4 index read, down 8.3 per cent from September.
“If this had been the overall result for the month it would have been the second weakest since the early 1990s recession, the only weaker read in recent times being when the pandemic shock hit in April 2020.”