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AU: Westpac-Melbourne Institute Index of Consumer Sentiment
| Actual | Previous | |
| Index Level | 80.6 | 83.0 |
Highlights
Australia's Westpac-Melbourne Institute index of consumer sentiment slipped back 2.9% to 80.6 in June after rising 3.5% to 83.0 in May from 80.1 in April. Households are concerned about high living costs amid the lingering Middle East conflict. They are also worried about family finances despite a slight easing in fears of higher borrowing costs.
Consumers are less pessimistic about their economic outlook for the next 12 months but their forecast for Australia's economic performance in the next five years slumped to a three-year low.
Definition
The Westpac-Melbourne Institute Index of Consumer Sentiment is based on a survey of 1,200 consumers on their assessment of short-term and long-term prospective economic conditions and their own financial circumstances. The survey is conducted early each month, usually just before and just after the Reserve Bank of Australia's monthly policy meeting.
Description
The pattern in consumer attitudes and spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is on whether economic growth is too strong and leads to inflation.
Consumer spending is the largest part of economic activity, so markets always closely follow consumer behaviour and sentiment. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. With this in mind, it's easy to see how this index of consumer attitudes gives insight to the direction of the economy. Just note that changes in consumer confidence and retail sales don't move in tandem month by month.