Economic Buzz: Australia Westpac Consumer Sentiment Index Drops In May

11 May 2022 , 10:13 AM

Australia Westpac-Melbourne Institute Index of Consumer Sentiment fell by 5.6% to 90.4 in May from 95.8 in April. The Index is now at its lowest level since August 2020 when households were unnerved by the second wave lock-down in Victoria. The weakness in this survey is not related to another pandemic shock but to the combination of rising cost of living pressures and the prospect of rising interest rates. The May print is 8.4% below the average seen in 2019, when consumer spending was generally described as lackluster, essentially holding flat over the year. Consumer spending is much more buoyant over 2022 to date, as households respond to the reopening of the economy. This lift reflects a normalization from the low spending/high saving pattern seen during the COVID restrictions and is being supported by a large reserve of excess savings accumulated over the past two years.Powered by Commodity Insights