Australians appear to be slowly getting over the initial shock of Joe Hockey's horror federal budget in May.
The ANZ-Roy Morgan consumer confidence index rose one per cent to 103.2 points last week, but is still 11 per cent below where it was in mid-April when budget cuts and tax increases started to leak.
ANZ senior economist Justin Fabo said that consumer confidence is showing signs of recovering.
"The key issue for confidence is whether the big declines witnessed around the release of the federal budget will prove transitory," he said.
"The bounce we have seen in the past three weeks has not been large enough to make us comfortable that this will be the case."
Mr Fabo expects the index to recover another three to five per cent over the next few months, which will be enough to help the non-mining sectors of the economy.
"Consumer spending will improve this year, although the confidence effects from the budget may weigh on consumer spending in the near term and impact on the speed of that recovery," he said.
The ANZ-Roy Morgan survey was conducted over the weekend of June 14-15 and involved 1,000 face to face interviews.
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