Australia consumer sentiment suffers setback in September

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A measure of Australian consumer sentiment suffered a sharp reversal in September as households became more concerned about the outlook for the economy and employment.

The survey of 1,200 people by the Melbourne Institute and Westpac Bank showed the index of consumer sentiment fell a seasonally adjusted 4.6 percent in September, from August when it jumped 3.8 percent.

The index reading of 94.0 was down 15.1 percent on the same month last year, with pessimists exceeding optimists.

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"This is a surprising and disappointing result," said Westpac chief economist Bill Evans.

The survey suggested the Coalition government's unpopular budget of welfare reforms, cutbacks and increased charges for services was still weighing on people's minds.

When asked what news they most recalled, respondents cited the budget and taxation ahead of all other subjects. Economic conditions and unemployment followed, with the bulk of the news being considered "unfavorable".

That might in part reflect data out last month showing unemployment hit a 12 year peak of 6.4 percent in July. The August jobs report is due on Thursday and analysts generally expect a small pullback to 6.3 percent.

Politics also remains a major factor. The survey's measure of sentiment among supporters of the Labor opposition is down 27 percent on a year ago at 83.4. In contrast, the index for supporters of the Liberal National government is steady at 109.5.

Economic worries were clearly at the forefront with the index for economic conditions over the next 12 months down 8.4 percent, while that for conditions over the next five years dropped 9.2 percent.

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The measure of family finances compared to a year ago fell 4.9 percent, though that on the outlook for the next 12 months edged up by 0.1 percent.

A measure on whether it was a good time to buy a major household item dipped 1.9 percent, while the index tracking assessments of 'time to buy a dwelling' fell 8.2 percent after jumping in August.