Surveys of consumers before and after the June cash rate meeting found sentiment dived in the days afterwards, countering some of the improvement stemming from a cost-of-living relief in state and federal budgets.
Even with the post-RBA meeting deterioration, the Westpac consumer confidence index rose to 83.6 in June from 82.2 in May but remained well below the neutral level of 100.
Westpac senior economist Matthew Hassan said pessimists were outnumbering optimists by nearly 20 percentage points.
"The survey detail suggests positives from fiscal support measures are being negated by increased concerns about inflation and the outlook for interest rates," Mr Hassan said.
While the cash rate stayed unchanged at 4.35 per cent again at the June meeting, where it has been since November, the RBA described the economic outlook as highly uncertain and was alert to stronger-than-thought consumption and a minor uptick in inflation.
"The implication is that some consumer hopes of a more positive message on inflation and the interest rate outlook were again dashed," Mr Hassan said.
Surveys show conditions are improving in the manufacturing sector. (Dean Lewins/AAP PHOTOS)
While Westpac and none of the other big banks expect another interest rate hike in this cycle, half of consumers surveyed anticipated mortgage rates to lift over the next 12 months.
Despite ongoing pressure on the household sector, Australian manufacturers have notched up a better few months for new orders.
This was after new orders stalled in the second half of 2023 and then declined at the start of this year as retailers struggled to move stock because of higher interest rates and price pressures weighing on consumers.
Westpac economist Ryan Wells said conditions in the manufacturing survey were improving, as highlighted in the quarterly report from the major bank and the Australian Chamber of Commerce and Industry.
"The broader economic backdrop for manufacturers has been challenging over the past year, highlighted by stalling new orders growth," Mr Wells said.
Tax cuts, to kick in from Monday, should help support household incomes and keep demand recovering in the second half of 2024.
Manufacturers are not out of the woods, however, with the survey picking up enduring labour shortages and still "acute" cost pressures.
After receding convincingly in the second half of 2023, progress on inflation has been slowing.
An inflation update is due from the Australian Bureau of Statistics on Wednesday for May.
Commonwealth Bank economists were predicting the annual growth rate to shift higher again over the month because of unfavourable base effects, but a weaker result on a monthly basis.
May inflation data should be 0.3 per cent lower on a monthly basis but lift to 3.7 per cent from 3.6 per cent, CBA forecasted.
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