The Westpac–Melbourne Institute Index of Consumer Sentiment fell 6.9% in June from 102.4 in May to 95.3 in June. It now appears that last month’s surge of optimism was a brief ‘relief rally’ following the RBA’s May rate cut and a Budget that was less ‘damaging’ than many feared. Individual components of the index highlight these renewed concerns about the economy. By far the biggest fall in June was in the sub-index tracking expectations for ‘economic conditions, next 5 years’ which plunged 17%, reversing all of last month’s 20% jump. Consumers’ near term assessments also declined with the sub-index tracking expectations for ‘economic conditions, next 12 months’ down 7.7% following a 9.2% rise last month. Assessments of family finances were more resilient with the sub-index tracking views on ‘family finances vs a year ago’ actually up 1.6% in the month, although the sub-index tracking expectations for ‘family finances, next 12 months’ registered a heavy 8.9% fall. Attitudes towards spending softened in June. And consumer responses around housing indicate more nervousness, particularly around the outlook for prices. (VIEW LINK)