SYDNEY, Dec 14 (Reuters) - A measure of Australia's consumer...

SYDNEY, Dec 14 (Reuters) - A measure of Australia's consumer sentiment slipped to an eight-month low in December after disappointing data on the domestic economy shook confidence in the outlook for the year ahead.

Wednesday's survey of 1,200 people from the Melbourne Institute and Westpac Bank (WBC) found consumer sentiment fell 3.4 percent in December, from November when it dipped 1.1 percent.

That took the index down to 97.3, implying pessimists now outnumbered optimists.

"It is likely that the key reasons behind this fall in Confidence are related to renewed concerns around the economy, interest rates, and the labour market," said Westpac chief economist Bill Evans.

The survey was taken in a week where data showed the Australian economy shrank by 0.5 percent in the third quarter, the first contraction since 2011.

Asked which news items they recalled the most, respondents cited "economic conditions" followed by "budget and tax", and "interest rates". All the news was rated predominantly as "unfavourable".

The survey's measure of expectations for the economic outlook over the next 12 months duly slid 5.2 percent, while economic conditions for the next five years fell 2.5 percent.

The measure of family finances compared to a year ago dipped 2.0 percent, while family finances over the next 12 months dropped 1.8 percent.

The measure of whether this was a good time to buy major household items sank 7.0 percent. That could be a worry for retailers into the crucial Christmas shopping season, though the correlation between sentiment and actual sales is loose to say the least.

The 'time to buy a dwelling' index bucked the trend to rise 2.6 percent, mainly thanks to a sharp recovery in confidence in the Sydney property market.