"This result emphasises how fragile consumer confidence has become in the current environment"
- Westpac chief economist Bill Evans
Confidence among Australian consumers unexpectedly dropped in April after posting big gains in the past two months, the Westpac Banking Corp and Melbourne Institute found. A gauge of consumer sentiment fell 5.1% this month, following gains of 2.0% in March and 7.7% in February. The reading was unexpected as the central bank's record low interest rates that were largely seen as an effective driver for household spending, which boosted Australia's strong retail sales in the first two months of this year. The report also showed that people's attitudes towards their own finances are still insecure and their views on the economic outlook are fragile. Even despite the deterioration, a reading of 104.9 means that optimists are still outnumbering pessimists.
"This is a surprising result," said Westpac chief economist Bill Evans. "This result emphasises how fragile consumer confidence has become in the current environment."
"This result emphasizes how fragile consumer confidence has become in the current environment. In fact, the index is now only 1.5% above its level in November 2011, following the Reserve Bank's first cut in this easing cycle and only 0.6% above the print from last November," Mr. Evans said.
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