Money flowed into recreation - especially ticketing services - and online marketplaces, hardware stores and discount department stores in October, contributing to a 0.8 per cent increase in Commonwealth Bank's household spending index.
CBA Chief Economist Stephen Halmarick said lower fuel prices, energy bill help and income tax cuts created some breathing room in household budgets to spend on nice-to-haves.
"It's important to note however that this increase in discretionary spending only partially offset the fall seen in September as the October boost was driven by a number of one-off major events," he clarified.
Spending on ticketing services was up a massive 27 per cent for the month.
Spending was higher across most categories in October, aside from education and utilities, the index based on customer payments showed.
Renters and mortgage-holders continued to tighten belts more than outright home-owners, reflecting rising rents and higher interest rates.
With household balance sheets finally starting to improve, household are reportedly feeling more upbeat.
Pessimists still outnumber optimists but the mood is improving, with the overall confidence index up more than 14 per cent from its mid-year lows based on surveying by Westpac-Melbourne Institute released on Tuesday.
Head of macro-forecasting at Westpac, Matthew Hassan, said the series fluctuated a lot last week in response to the United States election, falling sharply after Republican candidate Donald Trump secured victory before recovering later in the week.
Mr Hassan said the index was experiencing an unusually high degree of uncertainty.
Demand for workers is expected to remain strong despite a predicted drop in wages growth. (Angela Brkic/AAP PHOTOS)
"That said, the mood does look to be improving and is providing some more positive signs for retailers ahead of the all-important Christmas high season," he said.
"Certainly, spending plans are looking less austere than in previous years."
Separate surveying of HR professionals suggests pay packet growth will slow, in a blow to the outlook for household finances.
Wages are expected to grow by 2.7 per cent over the next year, down from 3.8 per cent in the 12 months to July 2025, the Australian HR Institute's latest quarterly survey has found.
Australian employees are experiencing their strongest wages growth in 15 years but many workers could see their pay increases fall back below inflation, said the institute's chief executive Sarah McCann-Bartlett.
"This could represent an engagement challenge for HR practitioners and line managers," she said.
Annual inflation is currently at 2.8 per cent, according to the Australian Bureau of Statistics, although this is also expected to drop over the next 12 months.
If the expectations of the 600-plus senior HR professionals and decision makers surveyed are borne out, it would represent a substantial reduction on the Reserve Bank of Australia's predictions for wages growth.
Even though wage growth may be coming down, the survey showed demand for workers was still strong.
Almost one in two organisations plan to increase staffing levels, while just three per cent anticipated they would reduce the size of their workforce.
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