Falling interest rates and pending tax cuts have seen an unprecedented recovery in consumer confidence for the quarter to September, with pessimistic respondents falling from 52% to 17%.
"After six very tough months, consumers are now starting to look forward with more optimism," said Westpac senior economist, Donna Purdue, of the the Westpac McDermott Miller consumer confidence survey released yesterday.
The index reached a seven- year low of 81.7 for the previous quarter, with 100 being the benchmark where optimism overtakes pessimism.
For the recent quarter, it bounced to 104.8.
Ms Purdue said lower fuel prices, the Reserve Bank's first cut in the official cash rate for five years and October 1 tax cuts all contributed to "a sigh of relief" for cash-strapped households.
The biggest driver in the confidence boost was the fall, to 17% from 52%, of respondents thinking economic times will be bad during the next 12 months.
Expectations for better economic times during the next five years increased from 19.7%, in June, to 38%, Ms Purdue said.
However, consumer spending would be "muted for some time yet", she said.
