SYDNEY Dec 12 A measure of Australian consumer
confidence pulled back in December as households fretted on the
outlook for the economy and finances, ending three months of
improvement and adding to the case for further cuts in interest
The poll of 1,200 people by the Melbourne Institute and
Westpac Bank showed its index of consumer sentiment
fell 4.1 percent in December to 100.00, unwinding much of
November's 5.2 percent increase.
On December last year, the index was still up 5.6 percent.
"This is a very surprising result," said Westpac chief
economist Bill Evans. "It was reasonable to expect that the
Index would respond quite positively to the rate cut the Reserve
Bank delivered last week."
The survey was conducted in a week when the Reserve Bank of
Australia (RBA) cut interest rates a quarter point to 3 percent,
matching record lows last touched during the global financial
"Evidence to date is that low rates are not generating much
traction with households," he added. "Hence there is likely to
be a decision to further ease rates in February or March."
Details of the survey showed respondents were worried about
the economic outlook despite the cuts to rates.
The index of expectations for the economy in the next 12
months dropped 4.3 percent, while that for the next five years
sagged 8.9 percent.
The index of family finances compared with a year ago fell
back by 7.2 percent, but that for finances over the next 12
months picked up by 4.6 percent.
In a disappointing omen for Christmas sales, the survey's
measure of whether it was a good time to buy a major household
item fell 4.8 percent.
Yet lower rates did boost confidence around whether now is a
good time to buy a house with that index up 1.9 percent to its
highest level since September 2009.
The breakdown of the survey also showed some odd
divergences, with women far gloomier than men. The sentiment
index for females fell 10 percent in the month, while that for
men rose by 2.4 percent.
There was a similar split in responses by voting intention.
Sentiment among supporters of the Labor government rose strongly
in the month, while that among opposition supporters plunged.
(Reporting by Wayne Cole)