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Consumer confidence increased by 2.5 points, hitting a total of 88.5, according to an ANZ-Roy Morgan report.
This is reportedly the highest it has been since May 2022 and 4.7 points higher than the same period in 2024.
“Households are feeling more confident about the economic outlook, with short-term economic confidence rising to its highest level since April 2022 (before the first rate hike in May 2022), while economic confidence over the next five years reached a 12-month high,” said ANZ economist Sophia Angala.
“The decline in weekly inflation expectations and the broad-based lift across the subindices may have been influenced by discussion that the RBA could cut rates at its February meeting.”
However, just one-fifth of Aussies believe their families are better off financially than last year, while 46 per cent believe they are worse off.
Despite this, one-third expect their family to be better off financially this time next year and 28 per cent anticipate being worse off.
Still, 27 per cent are expecting the economy to perform poorly over the coming year. Just 11 per cent are hopeful for the economy’s performance in the next 12 months; however, this is the highest this figure has been since July last year.
Over the next five years, the optimism for the state of the economy rises to 13 per cent, while 17 per cent expect poor performance.
Despite the stress, it’s clear people are improving on spending, with 27 per cent of people believing now is a good time to buy a major household item, up 2 per centage points. Forty-four per cent disagree, down 3 percentage points.
The ANZ-Roy Morgan data compliments Australian Bureau of Statistics (ABS) research that revealed that household spending rose 0.4 per cent in December. This follows a 0.8 per cent rise in November and a 1 per cent rise in October.
This increase was largely fuelled by higher spending on discretionary goods and services.
ABS head of business statistics, Robert Ewing, said: “Household spending on discretionary goods and services rose 0.6 per cent, which was the third straight monthly rise.
“The growth in December was driven by new vehicle purchases, dining out, air travel, and streaming services. Continued strength in clothing and footwear, furnishings and household equipment, and goods for recreation and culture also contributed to higher discretionary spending.
“Consumers have capitalised on the end-of-year sales season, driving a sustained rise in spending to finish 2024.”
[Related: Business turnover up as consumer confidence holds steady]
