Confidence in the labour market rose strongly in December, reaching its highest level since early 2008, but wage pressures remain tepid.
The Westpac McDermott Miller employee confidence index rose 6.8 points to 121.3 in the December quarter, where a reading of 100 separates overall optimism from pessimism.
"The labour market is in great shape according to employees," said Westpac chief economist Dominick Stephens. "Demand for workers has remained strong, and the official unemployment rate has fallen to its lowest in more than a decade. The shoe that has yet to drop is a pickup in wage inflation."
The biggest contributor to the quarterly result was a sharp lift in households' perceptions of current job opportunities that rose to 28.1 from 12.4 in the prior quarter.
This measure tends to closely follow the official unemployment rate which stands at 3.9 per cent.