Consumer sentiment declines slightly in September

 

The Westpac Melbourne Institute Index of Consumer Sentiment fell by 2.1% in October from 110.6 in September to 108.3 in October. Once the fall is taken into account, the Index still sits 2.5% above August levels and 9.2% above its level a year ago.

According to Westpac’s Chief Economist, Bill Evans this is a solid result as it follows the 4.6% jump in the Index in September – a result largely influenced by the expected election result.

“The modest fall in the Index is probably due to an expected retreat following the positive expectations around the election result. Other factors that might have weighed on the Index were the steady fall in the share market and the steady rise in the Australian dollar,” commented Mr Evans.

“There has been undoubted improvement in the sub-index tracking views on ‘whether now is a good time to buy a major household item’, improving by 6.9% in September and a further 3.2% in October. However, in this cycle, this index component has been consistently strong without any pick-up in consumer spending.

“The shutdown of the US government and media speculation around a US government default would also have unnerved respondents, and this adjustment [to the index] probably reflects a little ‘cooling off’ following the anticipation around the election result,” concluded Mr Evans.

Posted by Charles Tarbey on 17/10/2013 at 12:00 AM | Categories:

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