Aussie households are showing signs of reduced spending, with the Westpac-Melbourne Institute consumer sentiment index falling 1.7% to 92.9 in January, indicating pessimism about the future amid fears of interest rate hikes and a weak job market. Nearly two-thirds of consumers expect mortgage rates to rise, while confidence in job prospects is declining despite a low unemployment rate of 4.3%. The Reserve Bank of Australia may raise interest rates in February, potentially marking the shortest rate-cutting cycle in three decades. This shift in sentiment could signal a slowdown in consumer spending, which had surged recently.
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