Australian consumer sentiment dips amid uncertain economic outlook

Shoppers in Sydney, Australia, in 2011.
Shoppers in Sydney, Australia, in 2011. PHOTO: BLOOMBERG

SYDNEY (Reuters) - A measure of Australian consumer sentiment eased from a six-month high in December as worries about the economic outlook warred with a broad improvement in family finances.

The survey of 1,200 people by the Melbourne Institute and Westpac Bank showed its index of consumer sentiment dipped a seasonally adjusted 0.8 per cent in December, from November when it rose 3.9 per cent.

The index has been volatile for months now, with steep increases in November, August and October and a sharp fall in September.

The index reading of 100.8 was still 10.7 per cent higher than in December last year and showed optimists just outnumbering pessimists.

Westpac chief economist Bill Evans noted there had only been two months since January 2014 with higher index readings.

The details of the survey showed a reversal of November's moves, with confidence on the economy giving up some gains even as consumers felt more upbeat about their own finances.

Thus the survey's measure of confidence in the economy over the next 5 years fell 11.3 per cent, having surged 24.2 per cent in November. The measure of economic conditions for the next 12 months eased 4.2 per cent.

Yet the survey's measure of family finances compared to a year ago bounced 5.5 per cent, while the outlook for the next 12 months rose 5.8 per cent.

In a promising omen for retailers, the index of whether it was a good time to buy a major household item firmed 0.8 per cent, on top of a 4.8 per cent increase in November, and was up almost 12 per cent on last year.

The Reserve Bank of Australia (RBA) cited improving indicators of business and consumer confidence when it skipped a chance to cut interest rates this month.