While it was reported by the Westpac Melbourne Institute index of consumer sentiment that consumer sentiment has risen since the rate cuts, third quarter global online consumer confidence findings from Neilsen says otherwise.

The study found that consumer confidence slipped a further six points from the July quarter score of 103 to 97. This drop reaches below the neutral 100 mark fro the first time since early 2009.

But Australia’s index remains nine points above the global average index of 88. 

Chris Percy, managing director, Pacific, Nielsen Consumer Group, said Australians are pessimistic about the health of the country’s economy.

“The third quarter was one of volatility and stock market uncertainty as global financial markets plunged on the back of the US credit downgrade and fears over the worsening European sovereign debt crisis. Unfortunately, Australia has not been immune to what’s happening to rest the world, and the result has been a further weakening in both business and consumer confidence.

“A recessionary mindset is growing among consumers, as just over a third of consumers (34 per cent) now believe that Australia is in recession—up seven percentage points on the last quarter and 14 points from the start of year.

“As we move into the final months of the year, the much-anticipated recent rate cut by the Reserve Bank—the first cut in more than two-and-half years—should bolster the economy and boost consumer spending in the run up to Christmas, which will be very welcome news for Australian retailers which, up until now, had been forecasting a soft end to what’s already been a difficult trading year.”

For just over a quarter (27 per cento) of consumers, the economy re-emerged as one of the top concerned for Australians while utility bills also remained on top of the list – more than one in three householders cited this as their biggest worry. 

Also, one in every two Australians is putting any spare cash into savings, an indication that Australians are still feeling cash-strapped as the rising cost of living continues to pinch household budgets.