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Australia consumer confidence slips in October, U.S. worries hurt

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(Globalpost/GlobalPost)

SYDNEY (Reuters) - A measure of Australian consumer confidence eased in October, pulling back from a 33-month peak partly reflecting a fall in the share market during the survey week and worries about a possible U.S. debt default.

The survey also showed a marked shift in attitudes towards whether now is a good time to buy a home, with that index falling 10.3 percent to 135.0.

Westpac Chief Economist Bill Evans said the sharp decline in the dwelling index came after reports of strong gains in house prices that suggested deteriorating affordability.

He said warnings by some commentators of the potential for a price bubble may also have driven the shift in sentiment.

The survey of 1,200 people by the Melbourne Institute and Westpac Bank <WBC.AX> on Wednesday showed its index of consumer sentiment slipped 2.1 percent in October from September, when it had risen by a solid 4.7 percent.

The small monthly decline left the index still up 9.2 percent on October last year at 108.3, meaning optimists comfortably outnumber pessimists.

The strong bounce in sentiment last month came after the conservative Liberal-National coalition won victory in elections, putting an end to three years of sometimes chaotic minority Labor government.

"The modest fall in the Index is probably due to an expected retreat following the positive expectations around the election result," Evans said.

"Other factors that might have weighed on the Index were the steady fall in the share market through the survey week and the steady rise in the Australian dollar through the survey week."

Evans said the shutdown of the U.S. government and media speculation around a U.S. government default would also have unnerved respondents.

Respondents were more optimistic about their own finances, rating them slightly better than a year ago, but a measure of family finances over the coming 12 months slipped 5.5 percent.

The survey's measure of economic conditions over the next 12 months edged down 2.0 percent in October, while that for conditions over the next five years fell 7.3 percent.

(Reporting by Ian Chua; Editing by Paul Tait & Shri Navaratnam)

http://www.globalpost.com/dispatch/news/thomson-reuters/131008/australia-consumer-confidence-slips-october-after-big-rise-surv