07/10/2026
Time to read
3 mins

Key Points: 

  • Latest RBA interest rate decision has hit consumer confidence hard. 
  • Westpac survey says confidence at its lowest level since early 90s recession. 
  • NAB survey says continuing high levels of employment continue to keep household spending high pointing to a dilemma for the Federal Government and RBA. 
  • Housing confidence levels remain stable with differing views about further house price decline. 

 

The Westpac Melbourne Institute (the Institute) of consumer confidence index has fallen to its lowest level since the early 90s recession. The bank's indicator of consumer sentiment fell by 4.7% in October, more than 80 points what it was in April this year. 

 

However, the Institute advises that confidence among the 40% of survey respondents who completed the survey after the Reserve Bank's latest interest rate hike was even worse, to the worst level this century.  "The RBA has badly rattled consumers," according to the Institute . 

 

The Institute's Unemployment Expectations Index is also starting to slowly scale up reflecting the growing public awareness of the worsening economic predicament. 

 

The Institute's housing related sentiment index has remained steady with responses differing widely around expectations of future outlook. A slight majority of respondents in October felt that there will not be further deteriorations in house prices over the year, but a substantial minority thinks the opposite. 

 

Over at the NAB, its Consumer Sentiment Survey for the 3rd quarter of 2026 finds that, for the moment, resilient employment is supporting continuing spending in the economy. However, the NAB warns that continued spending should not be interpreted as household capacity to absorb higher inflation or financial shocks. "Secure employment is giving many households the income continuity and confidence to keep spending, even as they feel financially worse off," NAB says. 

 

However, the NAB Survey also shows that expectations around major purchases to continues to decrease and that consumer stress levels continue to climb. 

 

NAB Consumer Sentiment Survey