Consumer confidence lifted 2.2 per cent last week after consecutive falls in the first two weeks of the year brought the reading below its neutral level of 100.

ANZ and Roy Morgan reported a consumer confidence rating of 100.1 for the third week of 2022, down 11.1 percentage points from the same week in 2021 but a small rebound from the rating of 97.9 seen in the previous week.

“The recovery came in the same week that the unemployment rate was reported as dropping to its lowest in more than 13 years,” said ANZ head of Australian economics David Plank.

“COVID cases appear to have peaked, though deaths unfortunately made new highs.”

Western Australia recorded the strongest rise in confidence among the states, lifting 8.8 per cent compared to a week earlier, while gains were also seen in Victoria (7.7 per cent) and Queensland (3.7 per cent).

“The live entertainment of the Australian Open tennis and great weather might have added to Victoria’s positive outlook,” noted Mr Plank.

However, falls were recorded in both NSW (-2.4 per cent) and South Australia (-2.6 per cent).

The survey, taken in the week leading up to the latest inflation figures from the Australian Bureau of Statistics, put inflation expectations over the next two years at 5 per cent, an increase of 0.1 percentage point and matching the recent high reached in December.

Improvements were seen in the measures of current financial conditions, which lifted 6.3 per cent after last week’s 11.3 per cent drop, and future financial conditions, which moved up 0.6 per cent following a fall of 4.3 per cent.

Current economic conditions marked the third consecutive week of decline and fell 0.5 per cent, while future economic conditions dropped 0.9 per cent.

Meanwhile, the “time to buy a major household item” measure recovered by 6.3 per cent after crashing 15.8 per cent in the first two weeks of the year.