After a lengthy divergence between consumer sentiment and business confidence in Australia which began in 2014, the two sectors converged again around July 2018. Currently, both measures are around neutral or slightly negative levels. The latest reading of consumer sentiment has not really changed anything, although one particular aspect may be a cause for concern.
According to the latest Westpac-Melbourne Institute survey conducted in early June, average household optimism has continued to remain close to neutral levels. The Consumer Sentiment Index reversed May’s modest increase as it moved back to 100.7 from 101.3. Any reading above 100 indicates the number of consumers who are optimistic is greater than the number of consumers who are pessimistic. The long-term average reading is just over 101.