Consumer confidence has risen following two interest rate cuts in late 2011, but remains well below its level a year ago, according to a private survey.
The Westpac/Melbourne Institute Consumer Sentiment Index rose by 4.2 per cent to 101.1 index points in February, from 97.1 points in January.
Westpac chief economist Bill Evans said the index indicates that the Reserve Bank of Australia's decision to cut interest rates in November and December may have boosted confidence.
The RBA cut the cash rate by 25 basis points in each month to bring it to its current level of 4.25 per cent.
He said the index may also reflect an improvement in the outlook of the European and US economies since the beginning of the year.
"On the face of it, this is a strong result," he said.
"However the index is still 5.2 per cent below the level of a year ago and 13.6 per cent below its level of two years ago."
Mr Evans said the timing of the survey made the result difficult to interpret, with part of it falling before the RBA's surprise decision to hold interest rates in February.
"We note that the index was 4.2 per cent lower for responses received in the last three days of the survey, following the disappointment in the decision by the Reserve Bank, compared to those received in the first two days when households were confidently led to believe that a third rate cut could be expected."
All components of the index increased in February; the sub index tracking family finances was up 7.0 per cent on a year ago while the index tracking views on economic conditions was up 0.9 per cent.
