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Why consumer confidence is crashing this Christmas

It should be a boom time for Australia's retailers but just two weeks out from Christmas, festive cheer is evaporating as the latest figures show consumer sentiment has plunged.

“Quite a bad result indeed, disturbingly bad,” Bill Evans from Westpac said.

“Down 5.7 per cent, it's now down to a level we haven't seen since August 2011.”


The Consumer Sentiment Index fell from 96.6 in November to 91.1 for December with shoppers wary about spending

Our mood's worsened due to the economic outlook, job security fears, the lower Australian dollar and the federal budget.

There was an 11.8 per cent drop in the number of people who think now is the time to buy a major household item, the lowest since 2009.

The rating for 'time to buy a dwelling' fell 10.8 per cent, the weakest result in four years and there was a 4.4 per cent increase in those who think unemployment will rise next year.

Why consumers are losing faith in spending this Christmas. Photo: 7News
Why consumers are losing faith in spending this Christmas. Photo: 7News

Retailers are trying to stay up beat – with record low interest rates, with strong housing market, and fuel also at its lowest, consumers have more money in their wallets.

Ecomomists say it strengthens the case for more cuts from the Reserve Bank.

“We now think they will have to cut interest rates in February and March,” Mr Evans said.

We'll have to wait until the New Year to see how the RBA responds.