The weekly ANZ-Roy Morgan consumer confidence index – a pointer to future household spending – rose by 1.6 per cent, reaching its highest level in more than three months.
By far the largest contribution came from the “current economic conditions” category, which has jumped almost 20 per cent over the past fortnight.
“This likely reflects expectations for significant additional spending to be announced in next week’s federal budget,” ANZ senior economist Catherine Birch said on Tuesday.
Treasurer Josh Frydenberg last week outlined an updated fiscal strategy focused on jobs and economic recovery, rather than repairing the budget, until unemployment is comfortably back under six per cent.
The jobless rate sits at 6.8 per cent, after a surprise fall in August, but both Treasury and the Reserve Bank expect it will rise in coming months.
Still, at an index of 95 points, consumer confidence remains lower than its monthly average of 112.6 points going back to 1990.
A figure below 100 points indicates there are more pessimists than optimists.
Birch also noted the “current financial conditions” figures had effectively plateaued for several weeks.
“This indicator will be one to watch as JobSeeker and JobKeeper payments are reduced,” she said.
A reduction in the JobSeeker coronavirus supplement came into effect last Friday, while JobKeeper payments were pared back on Monday.