Westpac with the note.
Westpac Consumer Sentiment Index up 2.2% to 92.1 in May.
• Index recovers about a third of April’s tariff-related fall.
• Solid rebound in views on finances led by sharemarket rally, lower fuel prices.
• Benign inflation shores up consumer expectations for interest rate cuts.
Consumer sentiment has recovered just over a third of last month’s tariff-related fall, buoyed by a rebound in financial markets and a clear-cut Federal election result. The 2.2% rise in the Index month-to-month understates the extent of the improvement. Recall that our April survey was in the field over the week that included the ‘reciprocal tariffs’ announced by US President Trump. Sentiment was markedly weaker amongst those surveyed after the announcement with an average index read of just 86.6. Against this benchmark, the May read of 90.1 is more like a 6% rebound. That said, the Index is still 3.9% below its March level and in ‘firmly pessimistic’ territory overall.
