Investing.com-- Australian consumer sentiment rebounded slightly in May from a tariff-induced slump in the previous month, due to an improvement in financial markets and easing fuel prices, a private survey showed on Tuesday.
The Westpac-Melbourne Institute Consumer Sentiment Index rose 2.2% to 92.1 in May. The index had unexpectedly fallen 6% in April.
On the index, a level above 100 indicates optimism, and below indicates pessimism.
The Index was still 3.9% below its March level and in ‘firmly pessimistic’ territory overall, the survey stated.
May’s slight improvement was driven by a surge in views on family finances compared to a year ago, a rally in the S&P/ASX 200, and a drop in average petrol prices, according to Westpac economists.
"Responses across the survey week and across voter subgroups suggest the Federal election result was a small positive in the May month," Westpac economists wrote.
Consumers grew more optimistic about near-term economic conditions but held steady on five-year outlooks. Housing sentiment improved, with the "time to buy a dwelling" index rising 5.1%, and 87% of respondents expecting stable or higher home prices, the survey showed.
Westpac expects the Reserve Bank of Australia to cut rates by 25 basis points next week, noting inflation is back within the 2-3% target band.
The RBA is scheduled to meet on May 19-20 to decide on its interest rates.