A confidence level below 100 signalled households were pessimistic about the economic landscape. Photo: 123rf
Consumer confidence soured i June as households' hopes for interest rate relief faded.
The Westpac McDermott Miller Confidence Index fell 11 points to 82.2, wiping out gains from the past six months.
A confidence level below 100 signalled households were pessimistic about the economic landscape.
Households also felt less confident about their expected financial situation, and more people felt it was a bad time to buy a major household item.
In a sign of difficult conditions, 42 percent of households said their financial position had deteriorated over the past year, while 14 percent said it had improved.
Westpac senior economist Satish Ranchhod said households were doing it tough.
"Recent months have seen hopes for an early reduction in interest rates reduce as inflation has held up," Ranchhod said.
"Ongoing high borrowing costs, combined with a more uncertain labour market is undermining consumer confidence."
Ranchhod said inflation pressures meant any relief by way of a Reserve Bank rate cut was not on the horizon.
"That will have been a disappointment to those households who had been hoping for near term relief on their borrowing costs," he said.
In more bad news for the struggling retail sector, most households felt it was a bad time to buy a big-ticket item.
"With pressures on their finances and nervousness about where the economy is heading, households are keeping their wallets shut," Ranchhod said.
"Even with strong population growth, retail spending levels have been falling in recent months, with households switching away from nice to haves and towards value-for-money."
McDermott Miller market research director Imogen Rendall said the feeling of pessimism was visible across all demographics.
"Almost half of women see themselves as worse off financially than they were a year ago, compared with just under a third of men.
"Looking ahead to next year, both men and women have similar expectations for their personal finances, with around a quarter expecting to be worse off."
Rendall said women were especially downbeat about the economic outlook.
