The Reserve Bank is more optimistic about the outlook than it thought just a few weeks ago, suggesting it might not be such a global laggard in raising interest rates.
The minutes of the central bank's June board meeting, released on Tuesday, says data for the June quarter has so far been generally been positive after slower growth in the March quarter.
The recent improvement in the labour market conditions has also been a positive development.
"The strength of recent labour market data had removed some of the downside risk in the bank's forecast of wage growth," the minutes say.
A broad-based recovery in the global economy has also continued with increased investment lifting labour markets in many advanced economies.
This has led to an upgrade to the expected path of monetary policy in these economies.
Economists say the tone of the minutes is more upbeat than the statement immediately after the board meeting.
"We don't think rate rises are back on the cards yet and we would need to see an upgrade to inflation and wages forecasts to change our view of policy on hold until well into next year," Commonwealth Bank economist Kristina Clifton said.
Financial markets are now suggesting there could be an increase in the cash rate from a record low 1.5 per cent by the middle of 2018 rather than towards the end of 2018, as was the view at the time of the board meeting.
The weekly ANZ-Roy Morgan consumer confidence index eased 0.4 per cent but held around its long term average for a third week in a row.
ANZ head of Australian economics David Plank said the recovery in confidence seen over June was likely due to the improvement in labour market conditions.
"If jobs growth continues at the pace seen in recent months, it has the potential not only to boost confidence but perhaps also challenge our view on the stable course for monetary policy in 2018," Mr Plank said.
June jobs figures are released on Thursday.
After three months of strong gains in the number of people employed - ranging from 53,000 to 42,000 - economists expect an increase of about 15,000.
This would be enough to keep the jobless rate at a four-year low of 5.5 per cent after the steady drop from 5.9 per cent in March.
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