Australia Westpac Consumer Sentiment At 6-Month Low

(RTTNews) - Australia consumer sentiment deteriorated to a six-month low in April on escalating tariff war, survey data from Westpac showed Tuesday.

The Westpac-Melbourne Institute Consumer Sentiment Index fell to 90.1 in April from 95.9 in March.

The index is based on five sub-indices, two tracking assessments of family finances, two tracking expectations for the economy and one on whether now is 'a good time to buy a major household item'.

The 'family finances vs a year ago' sub-index registered a sharp 8.5 percent fall to 70.2 in April. Likewise, the 'family finances, next 12 months' sub-index declined 6.2 percent to 101.6. Consumers were less confident about the prospect of further interest rate cuts. The Westpac-Melbourne Institute Mortgage Rate Expectations Index, which measures expectations for variable mortgage rates over the coming twelve months, rose 11.3 percent to 98.1.

Survey respondents showed deepening uneasiness about developments abroad. The 'economic outlook, next 12 months' sub-index dropped 5.7 percent to 90.5. The 'economic outlook, next 5 years' sub-index also declined 3 percent to 98.4.

The 'time to buy a major household item' sub-index slid 7.3 percent in April.

The Westpac-Melbourne Institute Unemployment Expectations Index rose 5.1 percent to 123.9 in April. Consumers were less confident, but remained relatively secured about the job situation.

Regarding housing, the survey showed that consumers turned more pessimistic on assessments of 'time to buy' but they were more positive on the price outlook.

The 'time to buy a dwelling' index dropped 6.5 percent to 85.7, unwinding all of the rate cut related rally over the previous three months, Westpac said.

The House Price Expectations rose 4.7 percent to 153.4 and hit a nine-month high. The Reserve Bank of Australia is likely to deliver a further 25 basis point rate cut at its May meeting, Westpac Head of Australian Macro-Forecasting Matthew Hassan said. Amid the scale of tariff shocks unfolding abroad, the RBA is likely to become much more focused on downside risks to growth than lingering questions about inflation, the economist noted.