A 6% rise in sentiment to 88.9 remains mortgage-holder driven and below year-ago levels, signaling fragile confidence despite the RBA’s hold.
Australian consumer sentiment climbed 6% to 88.9 in August, driven largely by mortgage holders after the Reserve Bank of Australia held rates steady on 11 August. The gain, however, reflects a narrow relief reaction rather than a broad improvement, with pessimists still outnumbering optimists on current finances and the index well below year-ago levels.
The unemployment expectations index reversed last month’s improvement, rising above its long-run average—a key concern for the RBA’s policy calculus. With 59% of respondents expecting further mortgage rate hikes, households have not adjusted their rate outlook despite the central bank’s pause, leaving sentiment vulnerable ahead of the next meeting.
Markets may focus on the labor market signal, as deteriorating expectations could influence the RBA’s assessment of economic resilience to further tightening.