(Bloomberg) -- Australian households were gloomier this month as worrying headlines from abroad and weakness at home left them pessimistic about their prospects, regardless of government cash handouts.
Consumer confidence dropped 1.7% to 98.2 in September, with a reading below 100 signaling pessimists outnumber optimists, Westpac Banking Corp.’s survey showed. The poll of 1,200 adults conducted during the first week of the month contained a special question on recent household tax rebates, and found over half planned to save part or all of the cash.
“Pressure on family finances and concerns about the near-term outlook weighed on sentiment,” Westpac chief economist Bill Evans said Wednesday. “Concerns about the state of the economy, the international backdrop and employment are seeing consumers become more cautious.”
The result comes a day after a survey of Australian firms found sentiment poor there as well despite back-to-back interest-rate cuts and the government tax rebates. Australia’s economy has slowed sharply as households start to buckle under record debt and weak wage growth, and opt against spending.
Evans said the case for the Reserve Bank of Australia to lower rates further from the current 1% is “quite clear” with both the U.S. Federal Reserve and European Central Bank likely to ease in the next week. Evans sees the RBA cutting next month and again in February.
