Australia’s consumer sentiment index fell 0.7% in January, according to Reuters.

SYDNEY (Reuters) – Australian consumer sentiment fell for a second month in January as financial stress dominated the start of the new year, a survey showed on Tuesday, suggesting that spending will ease in the near term.

The Westpac-Melbourne Institute’s consumer sentiment index fell 0.7% in January from December, down 2.0%. The index increased by 13.8% from a year ago, but at 92.1 pessimists again outnumbered optimists.

A cautious outlook should reassure the Reserve Bank of Australia that consumers are in no rush to let go of spending and trigger inflation, leaving the door open for some easing in monetary policy in the coming months.

The biggest downside to the survey’s breakdown was its assessment of household finances from a year ago, which fell from 7.8% in December to 77.7% in 2024, more than the impact of the tax cuts.

The outlook, at least, for the next 12 months is that the household finance index rose 1.1% to 104.4, with optimists in the majority.

“Consumer sentiment has soured for two consecutive months and remains on the pessimistic side,” Westpac chief economist Lucy Ellis said. “However, sentiment is still less negative than a year ago and some elements suggest that consumers will continue to improve.”

The survey’s economic outlook for the next 12 months was flat in December, while the outlook for the next five years rose 0.7 percent.

A measure of whether it’s a good time to buy a major home appliance rose 1.8 percent to a historically weak 90.8.