Bill Evans
The Westpac Melbourne Institute Consumer Sentiment Index increased by 9.4% in April from 78.4 in March to 85.8 in April.
Westpac Chief Economist Bill Evans said: “This strong recovery in the Index can be largely attributed to the decision by the Board of the Reserve Bank to break the sequence of ten consecutive meetings when the cash rate was increased by deciding to pause at the April meeting.
“The survey was conducted over the four days of April 3–6 which covered the Board meeting on April 4.
“While this tightening cycle has been unique in terms of ten consecutive meetings of rate increases the most comparable period was October 2009 to May 2010 when the Board increased rates at every meeting apart from the February meeting. Initially the pause in June was treated sceptically by consumers with Confidence falling a further 5.6%.
“Following a second pause in July consumers became convinced that the pause could be sustained and Confidence increased by a solid 11% – not dissimilar from the result for April 2023.
“Confidence is now at its highest level since June 2022 although still 10.4% below April 2022, the month before the RBA Board began raising the cash rate.
“Despite this lift in April, we still characterise Consumer Sentiment as weak and consistent with Westpac’s view that consumer spending through 2023 and at least the first half of 2024 will be lacklustre.”
