Consumer confidence up despite rate rise

The survey found all its confidence sub-indices improving except "time to buy a major household item", which was down 0.5 per cent.

"Current financial conditions" rose 5.4 per cent, while "future financial conditions" gained 8.2 per cent from the previous week, and moved back above 100 and into net positive territory for the first time since late May.

The "current economic conditions" sub-indice rose 13.8 per cent to its highest level since early June.

ANZ head of Australian economics David Plank says the drop in confidence in the week of the Reserve Bank's cash rate lift has been "more than completely reversed" in the latest survey.

Confidence was up in Western Australia, NSW and Victoria, but declined in Queensland and South Australia.

Mr Plank said the sentiment about "future financial conditions" spoke to the strength of the labour market.

CommSec expects the latest jobless rate - which will be revealed by the Australian Bureau of Statistics on Thursday - to be steady at 3.5 per cent, with 20,000 jobs created in July.

The survey came as the Reserve Bank released its monetary policy meeting minutes on Tuesday.

At that meeting the RBA board lifted the cash rate 50 basis points to 1.85 per cent, in a bid to get inflation back to its target band of two to three per cent.

"The behaviour of household spending continued to present a key source of uncertainty for the outlook," the minutes read.

While many households had "large financial buffers", the board said "some households will face financial pressures in the period ahead, particularly those with low savings buffers and high debt".

"Members will be paying close attention to how the balance of these various factors affects the outlook for spending."

Shedding light on household spending, CommBank's latest intentions index showed a mixed result across sectors in July.

The household intentions index rose 1.05 per cent over the month, taking it to 114.8.

An index number above 100 indicates spending intentions are higher than they were at the start of the index in 2017.

The improvement was narrowly based on entertainment, transport, retail and utilities being up, while there were declines on the month for home buying, travel, health and fitness, education and household services.

On an annual basis the index was up 12.2 per cent relative to July last year, which was impacted by COVID-19 lockdowns in NSW and Victoria.

The RBA minutes said risks to the global economic outlook were "skewed to the downside" due to pressures on real incomes from higher inflation, the tightening of monetary policy in most countries, Russia's invasion of Ukraine, and the COVID-19 containment measures in China.

"Given high inflation, the resilient economy and the tight labour market, and taking into account the risks, members agreed it was appropriate to continue the process of normalising monetary conditions," the board said in justifying the rate rise. 

Pointing to the future, the board said it was "committed to doing what is necessary to ensure that inflation in Australia returns to target over time, while keeping the economy on an even keel".

NAB's Tapas Strickland said the bank was still expecting a 50 basis point hike in September, with the cash rate hitting 2.85 per cent by the end of the year.

"The RBA's language of keeping the economy on an 'even keel' suggests to us a downshift in the size of rate increases after September given uncertainties around the impact of hikes on the household sector," he said.