FX.co ★ Australia Consumer Sentiment Improves

In May 2025, the Westpac-Melbourne Institute Consumer Sentiment Index in Australia experienced a 2.2% increase month-on-month, climbing to 92.1. This rise follows a 6.0% decline in April and represents the third increase of the year, supported by a recovery in financial markets and the conclusion of the Federal election. The sub-index measuring 'family finances compared to a year ago' saw a significant 7.0% rise to 75.1, even though predictions for family finances over the next year decreased slightly by 0.8% to 100.7. Confidence in the economic conditions for the incoming year grew by 2.8% to 93.0, while expectations for the next five years made a modest gain of 0.2%, reaching 98.6. Additionally, the index evaluating whether it’s a good time to purchase major household items rose by 3.5% to 93.2. Notably, unemployment expectations decreased by 2.1% to 121.3, staying below the long-term average of 129. Mathew Hassan, who oversees Australian Macro-Forecasting, highlighted that all inflation measures have now realigned with the central bank's 2–3% target. However, he also pointed out that the prevailing policy conditions continue to exert pressure on consumers.