Australian Consumer Sentiment Improves in November

Investing.com — Australian consumer sentiment improved further in November, according to a private survey released on Tuesday. This recovery is driven by a growing belief that local interest rates will not rise and indications of easing inflation.

The Westpac-Melbourne Institute consumer sentiment index increased by 5.3% to 94.6 in early November, moving further away from near-record lows and extending gains from the previous month.

However, Westpac noted that the results of the U.S. presidential election, in which Donald Trump won a second term, created some uncertainty among Australian consumers regarding the economic outlook. Trump's expected protectionist policies could disrupt global trade and put pressure on China, a crucial trading partner for Australia.

While sentiment shifted negatively after Trump's victory, it improved towards the end of the survey period.

Matthew Hassan, Head of Australian Macro-Forecasting at Westpac, stated, "The consumer recovery gained more traction through October-November, but the survey details suggest that this momentum has been checked by renewed uncertainty following the U.S. election."

Despite this uncertainty, overall sentiment remained positive after the Reserve Bank of Australia (RBA) kept interest rates unchanged last week, and third-quarter inflation data showed some easing of price pressures.

Australian consumer sentiment had suffered significantly over the past two years due to rising interest rates and increasing cost of living pressures. While the RBA's continued hold on rates and the easing of inflation have supported sentiment recently, the Westpac index still hovers near historical lows.