FX.co ★ Australia Consumer Sentiment Hit 3-Month Low

In January 2026, the Westpac–Melbourne Institute Consumer Sentiment Index in Australia experienced a decrease of 1.7% from the previous month, settling at a three-month low of 92.9. This decline followed a significant 9.0% drop in December, as changing interest rate expectations continued to dampen consumer confidence. The sentiment data presented a mixed picture: the outlook for the economy over the next year saw a reduction of 6.5% to 88.4, while confidence in the five-year forecast increased slightly by 0.9% to 96.5. When it came to household finances, current assessments improved by 2.3% to reach 82.7 compared to the previous year, yet expectations for the coming 12 months fell by 4.5% to 97.8. The index measuring perceptions on whether it is a good time to purchase major household items showed little movement, rising marginally by 0.2% to 99.1. Conversely, attitudes toward unemployment worsened, with that index increasing by 2.1% to 129.4, just above its long-term average, indicating growing concerns about job security. According to Westpac's Mathew Hassan, consumers are becoming more cautious about the year 2026. He noted that persistent high inflation readings coupled with strong domestic spending have exacerbated fears that inflation remains unchecked.