The Westpac-Melbourne Institute survey of consumer sentiment rose 2.3% to 99.6 in February, following a gain of just 0.1% the previous month. The monthly indicator is based on a survey of 1,200 people that is administered during the first four days of the month.
A number below 100 signals that pessimists outweigh optimists.
Consumer sentiment is still feeling the lingering effects of a sharp slowdown in the economy last year. Gross domestic product (GDP) contracted unexpectedly in the third quarter amid broad weakness in the economy that extended to private investment and exports. However, the economy appears to have turned the corner in the final quarter of 2016, with inflation and employment running hotter.
Employment has increased sharply in recent months, with full-time jobs accelerating at a faster pace. The labor market ran into volatility last year, with part-time jobs far outweighing full-time employment in terms of overall growth.
The Australian Bureau of Statistics will release its latest batch of employment data on Thursday. Analysts in a median estimate say employers added 10,000 jobs last month, following a gain of 13,500 in December.