Consumers can't avoid pessimism

Consumer sentiment has reverted back to ‘cautiously pessimistic’ levels according to Westpac.

‘Inflation’ remains the dominant news item, along with a sharp turnaround in mortgage rate expectations.

As a result, the Westpac-Melbourne Institute Consumer Sentiment fell 9% to 94.5 point in December, after it had edged up above 100 in November, the only time since reopening from the Covid-19 pandemic.

While ‘international conditions’ has become a much less prominent topic, consumer focus turned to domestic concerns: with homebuyer sentiment weakening and economic conditions in general viewed as negative for the month of December

Westpac Economist Ryan Wells adds that Australians have become "more risk averse" about their finances, favouring bank deposits over equity investing.