Consumer sentiment falls for a second month after the RBA's rate rise. The sharemarket still lifts for a third day
The Westpac–Melbourne Institute consumer sentiment index fell 4.7 per cent to 80.4 in October, a six-month low and a second monthly fall, according to Trading Economics. Households' assessment of their finances over the past year fell 8 per cent to 66.9. Westpac's Matthew Hassan said upside inflation risks were materialising and he expects another RBA increase in November. The AFR and the Guardian headlined the result as the worst since the 1990s; we could not reconcile this with the level reported. The S&P/ASX 200 gained 49.3 points, or 0.57 per cent, to 8,735.7, its third straight rise, led by real estate (up 1.2 per cent), after a record on Wall Street's Nasdaq. Technology was the weakest sector. The Australian dollar was about 69.7 US cents.
Consumer mood shapes spending, which is most of the economy. A second month of falling confidence after four rate rises suggests that higher borrowing costs and fuel prices are being felt in household budgets, while markets stay buoyant on the global tech rally.
If you are building a household budget, assume borrowing costs stay high through the end of the year. The RBA meets next on November 3.
The gap between a rising sharemarket and sinking household sentiment is the story. It also leaves the Treasurer facing a savings package in December with voters in a poor mood.
DailyDrop Australia edition No. 2 · Morning · TUE., OCT. 6, 2026