Australia Westpac Consumer Sentiment Rebounds After RBA Hold, but Pessimism Persists

Australian consumer sentiment rebounded in August after the Reserve Bank of Australia left rates unchanged, but the improvement was limited and households remain cautious. The Westpac–Melbourne Institute Consumer Sentiment Index rose 6.0% to 88.9 from 83.9, still below the neutral 100 level and 9.7% lower than a year ago. The strongest gains came in current financial conditions and housing-related confidence, especially among mortgage holders. However, forward-looking measures were softer, with unemployment expectations rising and house price expectations falling. The report suggests the RBA’s August hold provided short-term relief, but did not restore confidence, and policy remains restrictive enough to weigh on households. Market implications are mainly for Australian interest-rate expectations and the broader view that the RBA is likely to keep a patient stance at its September meeting, though it has not fully ruled out another hike.