The survey of 1,200 people by the Melbourne Institute and Westpac Bank published on Wednesday reported consumer sentiment rose 3.6 percent in December, from November when it dipped 1.7 percent.
The index was up 6.1 percent on December last year at 103.3, meaning optimists now outnumbered pessimists.
“This is a surprisingly strong result and confirms the lift we have seen in the index over the last three months,” said Westpac Chief Economist Bill Evans.
“Growth in consumer spending is likely to have also bottomed out,” he added. “However, with ongoing weak income growth; a low savings rate; and high debt levels we cannot be confident that consumers have the capacity to sharply lift spending.”
Recent gross domestic product data showed household spending grew at the slowest pace since 2008 in the September quarter, limiting growth in the overall economy.
In a hopeful sign for incomes, the survey’s measure of family finances compared to a year ago climbed 5.6 percent in December, while the outlook for the next 12 months rose 1.8 percent.
The barometer of economic conditions over the next 12 months also rose a healthy 5.0 percent, while the outlook for the next five years increased by 3.4 percent.
The survey’s index of whether it was a good time to buy a major household item bounced 2.8 percent, a promising sign for the Christmas shopping season.
Consumers were also feeling more secure in their jobs, with that measure at its best level since May 2011.
The ‘time to buy a dwelling’ index rose 2.3 percent to 100.6, the first reading above 100 since the start of the year. – Reuters