The Westpac Consumer Confidence Change for Australia recorded a robust 12.80% increase in November 2025, a significant rebound from the -3.50% contraction in October and well above the 2.80% consensus forecast. This reading is the highest monthly gain since March 2025’s 4.00% rise, reversing a three-month downtrend that included September’s -3.10% dip. The 12-month average change now stands near 1.70%, underscoring the volatility in consumer sentiment amid shifting economic conditions.

Drivers this month

• Improved inflation outlook: CPI growth slowed to 3.10% YoY in October, easing cost pressures.
• Labour market strength: Unemployment steady at 3.80%, supporting income stability.
• Housing market stabilization: Mortgage rates plateaued, reducing financial stress.
• Government stimulus: Recent targeted fiscal measures boosted disposable income.

Policy pulse

The Reserve Bank of Australia (RBA) has maintained the cash rate at 4.10%, signaling a pause after a series of hikes. The consumer confidence surge aligns with expectations that inflation is moderating toward the 2-3% target range, allowing for a more balanced monetary stance. Financial conditions remain moderately tight but accommodative enough to support growth.

Market lens

Immediate reaction: The AUD/USD pair rose 0.60% within the first hour post-release, while 2-year Australian government bond yields climbed 8 basis points, reflecting improved risk appetite and inflation expectations.

Consumer confidence is a leading indicator of household spending, which accounts for roughly 55% of Australia’s GDP. The November jump to 12.80% change signals a potential acceleration in consumption growth after subdued readings earlier in 2025. This optimism is supported by core macroeconomic indicators showing resilience.

Inflation and employment

October’s Consumer Price Index (CPI) rose 3.10% YoY, down from 3.80% in July, indicating easing inflationary pressures. The unemployment rate held steady at 3.80%, near historic lows, sustaining wage growth and consumer purchasing power.

Monetary policy & financial conditions

The RBA’s current cash rate of 4.10% reflects a cautious approach to balancing inflation control with growth support. Credit growth remains moderate, and mortgage rates have stabilized after peaking mid-year, reducing household debt servicing burdens.

Fiscal policy & government budget

Recent fiscal measures, including targeted tax rebates and infrastructure spending, have injected approximately AUD 3 billion into the economy this quarter. The government’s budget remains on track for a modest deficit of 1.20% of GDP in FY2025-26, supporting demand without overheating.

Figure 1: Westpac Consumer Confidence Change, Feb-Nov 2025 (monthly % change)

• Feb 2025: 0.10%
• Mar 2025: 4.00%
• Apr 2025: -6.00%
• May 2025: 2.20%
• Jun 2025: 0.50%
• Jul 2025: 0.60%
• Aug 2025: 5.70%
• Sep 2025: -3.10%
• Oct 2025: -3.50%
• Nov 2025: 12.80%

Market lens

Immediate reaction: AUD/USD strengthened by 0.60%, 2-year yields rose 8 bps, and equity indices gained 0.40%, reflecting renewed confidence in the domestic economy and inflation outlook.

Looking ahead, the Westpac Consumer Confidence Change points to a cautiously optimistic consumer environment. However, risks remain from external shocks and geopolitical tensions, including supply chain disruptions and global inflationary pressures.

Bullish scenario (30% probability)

• Inflation continues to ease below 3%, allowing RBA to hold rates steady or cut by mid-2026.
• Labour market remains tight, boosting wages and spending power.
• Fiscal stimulus sustains disposable income growth.
• Consumer confidence rises above 15% monthly change, driving robust consumption growth.

Base scenario (50% probability)

• Inflation stabilizes around 3%, with RBA maintaining current rates.
• Employment remains steady but wage growth moderates.
• Consumer confidence fluctuates between 5-10% monthly change.
• Household spending grows modestly, supporting GDP growth near 2.50% annually.

Bearish scenario (20% probability)

• External shocks (e.g., geopolitical tensions) disrupt trade and inflation rises again.
• RBA resumes rate hikes, tightening financial conditions.
• Consumer confidence falls below zero, contracting spending.
• GDP growth slows below 1.50%, increasing recession risk.

November’s Westpac Consumer Confidence Change reading of 12.80% marks a decisive shift in Australian consumer sentiment. Supported by easing inflation, steady employment, and fiscal support, the data suggest a more positive macroeconomic trajectory heading into 2026. However, vigilance is warranted given external uncertainties and potential monetary policy adjustments. Financial markets have responded favorably, reflecting improved risk appetite and growth expectations. Structural trends, including household debt levels and demographic shifts, will continue to influence the medium-term outlook.

Overall, the consumer confidence rebound provides a foundation for sustained economic growth, but policymakers and investors should monitor inflation dynamics and geopolitical risks closely.

Key Markets Likely to React to Westpac Consumer Confidence Change

Consumer confidence is a bellwether for domestic demand and risk sentiment. Markets sensitive to Australian economic health and monetary policy typically react to these releases. The following tradable symbols historically track or influence movements tied to consumer sentiment shifts:

• AUD – The Australian dollar often strengthens on positive consumer data, reflecting improved growth prospects.
• AUDUSD – This major currency pair reacts swiftly to shifts in Australian economic sentiment and RBA policy expectations.
• BHP – As a major Australian resource stock, BHP’s price is sensitive to domestic demand and global growth outlooks.
• BTCUSD – Bitcoin often moves inversely to risk sentiment; improved confidence can reduce safe-haven demand.
• CBA – Commonwealth Bank of Australia’s shares reflect consumer credit conditions and spending trends.

Insight: Westpac Consumer Confidence Change vs. AUDUSD Since 2020

Since 2020, monthly changes in Westpac Consumer Confidence have shown a positive correlation (~0.65) with the AUDUSD exchange rate. Periods of rising confidence typically coincide with AUDUSD appreciation, driven by expectations of stronger domestic growth and stable monetary policy. For example, the confidence surge in November 2025 (12.80%) was accompanied by a 0.60% AUDUSD gain, consistent with this historical pattern. This relationship underscores the importance of consumer sentiment as a leading indicator for currency traders and macro investors.

FAQs

What is the Westpac Consumer Confidence Change?

The Westpac Consumer Confidence Change measures the monthly percentage change in Australian consumer sentiment, reflecting optimism or pessimism about the economy.

Why is the November 2025 reading significant?

The 12.80% increase in November 2025 is the largest monthly gain in over eight months, signaling a strong rebound in consumer optimism after recent declines.

How does consumer confidence affect the Australian economy?

Consumer confidence influences household spending, which drives over half of Australia’s GDP, impacting growth, inflation, and monetary policy decisions.

Final takeaway: The sharp November rebound in Westpac Consumer Confidence Change suggests Australian consumers are regaining optimism amid easing inflation and stable labour markets. This bodes well for domestic demand and economic growth in 2026, though vigilance on external risks remains essential.

Updated 11/13/25

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.