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GOOD jobs prospects and a rising dollar are overriding fears of another interest rate increase, according to the latest consumer confidence survey.
While another rate rise, possibly later this month, remains on the cards, the Westpac/Melbourne Institute consumer sentiment survey for December rose almost 5 per cent, after a fall of 4 per cent over the previous two months.
Confidence is now 10 per -cent higher than at the same time last year.
The confidence does not extend to the housing market, however, with auction clearance rates around the country at lows not seen for a decade last month, as the Reserve Bank's two interest rate rises late last year began to bite.
Most capital cities recorded clearance rates well below 50 per cent - except in Adelaide, which chalked up a slight rise to 53 per cent in December.
The confidence survey follows comments from Reserve Bank governor Ian Macfarlane, after the second quarter of a percentage point increase in rates last year, that there was no rush to move further.
Westpac economist Justin Smirk said although there was a likely chance of another rise in official interest rates at the next meeting of the Reserve Bank board, consumers were buoyed by general economic conditions.
He said consumers felt secure in their jobs and were enjoying the sense of importance that came with a rising Australian dollar.
"There is a feel-good factor in the rising currency," Mr Smirk said.
"Strong consumption and robust momentum in credit growth is why we believe the Reserve Bank will assess that interest rates are still too low."
The confidence was backed strong employment figures.