The latest Westpac-Melbourne Institute Consumer Sentiment index slipped 0.5% to 84.6 in September, from 85.0 in August.

Westpac said consumer pessimism continues to dominate as it has done for the past two years, however, focus is shifting. Cost-of-living pressures are less intense and fears of further interest rate hikes have eased. Instead, consumers are more concerned about the future of the economy and how this affects jobs.

The subindices for family finances were offset by a loss of confidence around the economy, with the subindices tracking the economic outlook over the next 12 months and the next five year period both declining.