Australian consumer sentiment falls to 7 month-low

Australia's consumer confidence has dropped to its lowest level since July 2013, with families becoming increasingly worried about their employment prospects in the year ahead, a survey released Wednesday found. The Westpac-Melbourne Institute Index of Consumer sentiment fell by 3 percent in February to a reading of 100.2 points from 103.3 in January, just above the 100-point level where optimists equal pessimists. Westpac's chief economist Bill Evans said the result was surprisingly weak. "The Index is now down 7.5 percent on a year ago... and is at its lowest level since July last year," he said in a statement. "The theme from this survey appears to be that households are particularly worried about the future." He said the component of the index measuring consumers' expectations for the economy over the next 12 months was at its lowest level in almost two years. "We suspect the run of 'bad news' around the motor vehicle industry, other manufacturers and Qantas may have rattled consumers," Evans said. Evans said the survey showed that exuberance around house prices started to wane. "Households are clearly more worried about interest rates as well," he added. Australians continue to be very concerned about the labor market, with more people expecting unemployment to rise in the year ahead, according to Evans. He said the Westpac-Melbourne Institute Index of Unemployment Expectations in February rose by 2.3 percent to its second highest level since July 2009.