Consumers have got their groove back, with confidence levels rebounding to where they were before people started worrying about government budget cuts.

The latest weekly ANZ-Roy Morgan survey shows consumer confidence levels have completely recovered from the sharp drop that began in April as stories emerged about Federal Budget cuts.

Consumer confidence levels have risen 2.4 per cent in the past week, suggesting the falls in April and May were only temporary and related to “sticker shock” from the Budget.

ANZ chief economist, Warren Hogan, said consumer confidence levels were now back in line with business confidence.

“Consumer confidence is now back to pre-budget levels and consistent with moderate growth in consumption and economic activity,” he said.

“The good news is that the headline impact of the budget appears to be temporary and the more enduring features of the economy, such as rising share and house prices, job creation and a stable world economy are now driving consumer attitudes to spending and finances.”

Hogan said that now consumers were feeling more confident, retail sales should pick up.

ANZ expects consumer spending to remain moderate in 2014, with improvements to flow through into 2015.

AAP