Hotter-than-expected inflation does not seem to be worrying consumers, with confidence levels stabilising over January.

While well below long-run averages, the 0.9-point uptick follows the minimal movement in the ANZ and Roy Morgan indicator over the month.

Sitting at 86.8, the confidence measure jumped in early January but has stayed within a narrow band of 1.8 points in the first four weeks of the year.

The index, which draws on survey responses from 1500 interviews each week, charted a rise in sentiment in NSW, Queensland and Western Australia but a decline in Victoria and South Australia.

ANZ senior economist Adelaide Timbrell said confidence remains well below the neutral level of 100 but has returned to its highest level since June 2022.

Despite the consumer price index coming in above expectations at 7.8 percent last week, the inflation expectations sub-index fell to 5.3 percent, its lowest level since September.

“This is a signal that household inflation expectations remain somewhat anchored, despite accelerating inflation through 2022,” Timbrell said.

The “time to buy a major household item” sub-index recovered 1.4 points after a 4.7-point loss over the previous fortnight.

While consumers have been worried about economic and financial conditions for months, they have still been spending.

Official retail trade data, due on Tuesday, will likely reveal robust spending through the final month of 2022, buoyed by shopping and dining out during the festive period.

Another 0.4 percent lift is expected in December after the strong 1.4 percent lift in November driven by Black Friday and Cyber Monday sales.