SYDNEY (Reuters) -Australia's consumer sentiment turned optimistic in November for the first time in almost four years thanks to a much better outlook for family finances and the economy, a survey showed
on Tuesday, even as the central bank held interest rates steady.
A Westpac-Melbourne Institute survey showed its main index of consumer sentiment surged 12.8% to 103.8 in November, a seven-year high, excluding the COVID-19 pandemic period. The reading above 100 suggested optimists outnumbered pessimists for the first time since February 2022.
“This is an extraordinary and somewhat surprising result,” said Matthew Hassan, Westpac’s head of Australian macro-forecasting.
"The survey shows that the dent from a changed outlook for interest rates has been more than offset by other positives, suggesting that the consumer recovery is likely to continue tracking well, at least for now."
DETAILS
* The breakdown of the survey showed the main driver was theoutlook for family finances over the next year, which jumped by12.3% to 109.1. * The survey's measure of the economic outlook for the next12 months firmed 16.6%, while the outlook for the next fiveyears rose by 15.3%. * The measure of whether it was a good time to buy a majorhousehold item rose 15% to 111.6.KEY CONTEXT
* The Reserve Bank of Australia held interest rates at 3.6%earlier this month, saying it was cautious about easing furthergiven higher inflation, firmer consumer demand and a revival inthe housing market. * Some economists - including from the Commonwealth Bank ofAustralia and HSBC - have called for an end to the currenteasing cycle. * Financial markets are pricing in a 66% chance that the RBAcould deliver one more cut in May next year.(Reporting by Stella Qiu; Editing by Jamie Freed)
