Australian consumer sentiment falls for fifth month in April

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Australian consumer sentiment falls for fifth month in April

SYDNEY Reuters - Consumer sentiment slipped for a fifth month in April as rising inflation and the risk of higher interest rates weighed on family finances and spending intentions.

The consumer sentiment index of the Westpac-Melbourne Institute was down 0.9% in April from March, when it fell 4.2%. The index was down 19.6% from April last year, to 95.8, almost back to where it was pre-pandemic.

The government's budget in March had a limited effect on the national mood, even though it contained pre-election tax breaks and cuts to fuel excise, according to the survey.

There was a chance of widespread flooding across the east coast, which had an effect on sentiment.

According to Bill Evans, Westpac chief economist Bill Evans, there is more evidence that interest rates, inflation, and weather continued to be unnerving for consumers in the current survey.

He noted that sentiment among people with a home loan fell by 9.2% in April due to speculation that the Reserve Bank of Australia RBA could raise interest rates as early as June.

Some 70.0% of respondents believed there would be a rise in rates in the next 12 months, the highest level since August 2016 when the question was first included in the survey.

The survey's measure of family finances fell 4.8% compared to a year ago's 4.8%, while the outlook for finances fell 0.9% over the next 12 months.

The survey's measures of whether it was a good time to buy a major household item sank 5.3% and is down 20% on a year ago.

After a sharp fall in March, the outlook for the next five years went up by 5.8%, while the outlook for the next five years went up 1.0%.