Released on Tuesday, the latest report from Australia and New Zealand Banking Group (ANZ) and Roy Morgan showed that this week's growth of 4.9 points also marks the first increase in the first week of January for five years since January 2018, when the first weekly result was 122.0, up 5.5 points on the last week of December 2017.
Mixed results were recorded across some Australian states, as New South Wales, Victoria, Queensland and South Australia saw upticks in consumer confidence while the sentiment in Western Australia went down.
According to the report, weekly inflation expectations dropped sharply from the last print of 2022, falling 0.9 percentage points to 5.0 percent. Its moving average for the last four releases was down 0.3 percentage points to 5.7 percent.
Despite positive signs emerging in many subindices, the general confidence is still 18.6 points lower than that of the same week a year ago.
Following eight hikes in a row, Australia's cash rate target presently sits at 3.1 percent, with the country's inflation surging to a record-high 7.3 percent since 1990.
As for current financial conditions, 22 percent of Australians, down one percentage point, say their families are "better off" financially than this time last year, compared to 45 percent, down one percentage point, believing their families are "worse off" financially.
The report also highlighted that sentiment regarding the Australian economy in the longer term is still very weak with only 14 percent, up 2 percentage points, of Australians expecting "good times" for the economy over the next five years, compared to 17 percent, down one percentage point, expecting "bad times."
"Despite the new year jump, confidence is still well below the neutral level (100) and the long-run average of 111.7. Household inflation expectations eased significantly by 0.9 percentage points from the last print of 2022, suggesting cautious optimism about lower inflation through 2023," said ANZ Senior Economist Adelaide Timbrell.
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