SYDNEY Australian consumer sentiment turned sour after a surprise hike in interest rates this month, a survey showed on Tuesday, with consumers becoming worried about prospects of unemployment amid the warning of more rate increases to come.

The Westpac-Melbourne Institute index of consumer sentiment rose 0.2% in June to 79.2, steadying near recession lows and suggesting pessimists greatly outnumbered optimists.

But the slight improvement masked a significant difference in sentiment readings before and after the Reserve Bank Australia's decision to hike by another quarter-point on June 6, with the confidence reading coming in at 72.6 after the hike, and at 89.0 before.

"While the full survey showed little net change in sentiment, responses within the survey week show a big rate rise impact," Westpac chief economist Bill Evans said.

"Of most concern is confidence around jobs – which has been the single bright spot in otherwise bleak consumer surveys over the last year. This now looks to be fading fast."

(Reporting by Stella Qiu; Editing by Kim Coghill)