Australian Consumer Confidence Rises to Positive Levels, Potentially Easing Rate Cut Expectations

• Consumer sentiment surges past 100 threshold for the first time since February 2022, ending 44 months of pessimism based on Westpac survey data.

• Family finances sub-index jumps 12.3% to 109.1, reflecting household optimism despite slight mortgage expectation dips.

• Unemployment expectations index rises 9.3% to 139.5, highlighting growing job market worries even as overall confidence improves.

Australian consumer confidence surges in November 2025, boosting economic optimism amid rate stability. Discover key drivers and implications for households—explore now for insights into Australia’s financial landscape.

What is driving the rise in Australian consumer confidence?

Australian consumer confidence has experienced a significant uptick, climbing 12.8% to 103.8 points in November according to Westpac Banking Corp.’s survey. This marks the first time sentiment has turned net positive since February 2022, breaking a prolonged period of negativity. The improvement stems from positive perceptions of the economy and family finances, countering earlier concerns over inflation and interest rates.

How has the job market influenced recent consumer sentiment?

Australia’s unemployment rate has climbed to 4.5%, the highest since 2021, surprising economists and signaling a cooling labor market. The Australian Bureau of Statistics reported a modest 14,900 increase in employment for September, below the expected 20,000 gain, while the participation rate edged up to 67%. Despite these challenges, consumer confidence has rebounded, with Westpac’s Matthew Hassan noting that positive momentum in housing and demand is offsetting renewed worries about jobs and borrowing costs. The Westpac-Melbourne Institute Unemployment Expectations Index rose 9.3% to 139.5, indicating more households anticipate rising unemployment in the coming year. Expert analysis from sources like the Reserve Bank of Australia underscores that persistent inflation and low unemployment readings continue to shape monetary policy decisions.

Frequently Asked Questions

What caused Australian consumer confidence to exceed 100 points after 44 months?

The surge to 103.8 points in November followed improved views on family finances and the economy, as per Westpac’s survey. A 12.3% rise in the family finances sub-index to 109.1 points highlighted this optimism, despite a minor 0.3% dip in mortgage expectations, driven by the Reserve Bank’s steady interest rate policy at 3.6%.

Why did the Reserve Bank of Australia hold interest rates steady amid rising confidence?

The Reserve Bank maintained rates at 3.6% due to ongoing inflation concerns and a resilient yet cooling labor market, as stated by Governor Michele Bullock. This decision followed three rate cuts earlier in the year, aiming to balance economic growth with price stability while monitoring unemployment at 4.5%.

Key Takeaways

• Net positive sentiment returns: Australian consumer confidence hit 103.8 in November, the first above-100 reading since early 2022, signaling a shift from prolonged pessimism.
• Job market tensions persist: Unemployment rose to 4.5%, with expectations index at 139.5, yet housing and demand improvements cushioned overall mood.
• Policy implications ahead: Steady rates at 3.6% reflect caution on inflation, reducing near-term cut likelihood—households should monitor labor data closely.

Conclusion

Australian consumer confidence has rebounded impressively to net positive territory at 103.8 points, driven by stronger family finance perceptions and economic outlooks despite unemployment climbing to 4.5% and rising job concerns. As the Reserve Bank holds rates steady at 3.6%, this sentiment shift counters inflation worries, suggesting a stabilizing yet cautious financial environment. Looking forward, sustained improvements in housing and demand could further bolster household resilience—stay informed on labor market developments for proactive financial planning.

Consumer confidence in Australia escalated substantially in November as households began to look on the positive side of the economy. Sources indicated that this boost will likely reduce the likelihood of an interest rate cut soon.

This announcement followed Westpac Banking Corp.’s release of its survey findings, which highlighted a 12.8% surge in sentiment to 103.8 points. The change marked the first time since February 2022, when 100 was the threshold, ending a streak of 44 months during which Australian consumers felt negative emotions.

“This is an amazing and somewhat unexpected outcome. November is the first month in nearly four years where consumer sentiment is ‘net positive,’” explained Matthew Hassan, who leads Australian macro forecasting at Westpac.

Still, this comes as Australia’s unemployment rate increased to 4.5%, marking its highest level since 2021. The unexpected jump caught economists off guard, indicating that the previously resilient labor market is starting to cool.

The latest data released by the Australian Bureau of Statistics (ABS) suggests a 14,900 increase in employment in September, falling short of forecasts for a rise of 20,000. Meanwhile, more Australians found jobs or started looking for one, slightly lifting the participation rate to 67%.

Australia’s consumer confidence rises despite escalating worries about the job market

Hassan acknowledged that there were clear signs that the recovery is gaining momentum, particularly in the housing market and consumer demand. According to him, the most amazing fact is how these positive factors have counteracted renewed concerns about interest rates and inflation.

His remarks followed the Reserve Bank’s recent decision to maintain borrowing costs unchanged at 3.6%. When reporters asked the central bank to clarify the reason behind this decision, the bank pointed out ongoing concerns about low unemployment and inflation.

With this argument in mind, the Governor of the Reserve Bank of Australia, Michele Bullock, expressed the unlikelihood of an additional interest rate reduction soon, following the three rate cuts this year.

Meanwhile, the positive economic outlook stems from a substantial improvement in how households perceive their financial situation. Following this economic optimism, the sub-index for family finances 2026 surged by 12.3%, reaching a score of 109.1.

On the other hand, Westpac noted that this increase occurred despite a small decline of approximately 0.3% in mortgage expectations from households.

Still, individuals have expressed concerns about the job market, despite being optimistic about the economy and their family finances.

This was after the Westpac–Melbourne Institute Unemployment Expectations Index escalated by 9.3% in November, reaching 139.5. Notably, a larger number on this index indicates that more people believe unemployment will increase significantly in the coming year.

Australian consumer confidence in their finance surged amid a third interest rate cut

According to the Westpac-Melbourne Institute survey, a measure of how Australians feel about their finances jumped in August thanks to the third interest rate cut this year, which boosted sentiment about money and the economy.

The Survey pointed out that its index on consumer sentiment jumped 5.7% in July to 98.5, marking the highest level since early 2022. However, this number was below 100, indicating that there are still more pessimists than optimists, but only slightly.

This boost was led by the Reserve Bank of Australia’s quarter-point cut in interest rates to 3.60%, accompanied by a possible further cut later this year. Hassan commented, “This seems to have strengthened consumer expectations that mortgage rates will decrease, providing a broad lift in sentiment.”

In the meantime, it is worth noting that the survey demonstrated an overall improvement in confidence across various areas. A measure of economic outlook for the next year surged by 7.6%, and a five-year outlook rose by 5.4%.