Consumer confidence has lifted for the first time in six weeks as Australians grow more optimistic about the future of their finances.
A bump in the 'future financial conditions' gauge helped push up ANZ and Roy Morgan's weekly indicator by 2.7 per cent.
But consumer sentiment remains well below historical averages and has a long way to go to recover from the cumulative 10.4 per cent decline in the previous six weeks.
"The lift in confidence doesn't change the fact it remains at a level not matched since the early 1990s recession, putting aside the early pandemic period," ANZ head of Australian economics David Plank said.
Respondents felt more positive about the future last week, with the 'future financial conditions' subindex climbing 4.9 per cent and 'future economic conditions' lifting three per cent.
But the 'good time to buy a major household item' fell again last week, the fifth time in six weeks.
Mr Plank said downcast consumer sentiment was still not reflected in spending data.
"Whether this disconnect can continue is a central issue for policy makers," he said.
The Reserve Bank of Australia has been watching spending-related indicators for signs consumers are starting to limit their spending in response to interest rate hikes.
The central bank is due to release the minutes from its November board meeting on Tuesday, which will reveal the thinking behind its latest 25 basis points interest rate hike.
Some experts expected to see a return to a faster pace of tightening following the surprisingly high September quarter inflation read of 7.3 per cent.
The bank did however upgrade its inflation forecast and now sees it peaking at eight per cent before the end of the year.
Weaker-than-expected inflation in the US could suggest inflation is starting to ease around the globe, which will be welcome news to the RBA and mortgage holders enduring ballooning mortgage repayments.
A slight softening of China's hardline COVID-19 stance could also offer hope, with the bank flagging the economic downturn in China as a key source of uncertainty for its monetary policy tightening strategy.
© AAP 2022