An index of consumer sentiment rose 5.2% in September from August to its highest level since July 2007.
The index rose to 119.3 points in September in seasonally adjusted terms from 113.4 points in August, compilers Westpac and the Melbourne Institute said in a statement.
In annual terms, the consumer sentiment index rose 29.4% in September in seasonally adjusted terms. In trend terms, the index rose 2.0% in September from August, contributing to a 34.1% annual increase.Westpac chief economist Bill Evans said the index has risen by 34.4% over the last four months, the largest four-month increase in the 35-year history of the index. "This is a truly extraordinary result," he said. "The standout story is the relief rally for consumers - relief that the economy has avoided recession and that expected job losses have not materialised," he said in a statement.
"This is clear from the survey detail. The biggest shift over the last four months has been in components that capture expectations (+49.6%). In contrast, components measuring views on current conditions have risen by a more moderate 14.4% over this period," he added.
The case for a rate hike as early as next month has been strengthened considerably by this further surge in confidence, Evans said.