Consumers are happy and business conditions are at their best since the global financial crisis but, oddly, business confidence fell last month.
The ANZ/Roy Morgan weekly consumer confidence index is at its highest level in nearly two years, and its measure of confidence about the economy is at its highest since Malcolm Turnbull became prime minister eight weeks ago.
However the National Australia Bank monthly survey shows that business confidence fell in October after initially getting a boost from Mr Turnbull's ascension to the nation's top job.
The NAB puts the short duration of the bounce in business confidence down to worries about the economic strength of Australia's trading partners.
"While the government's leadership resolution appeared to have a notable, albeit temporary, effect, it is difficult to disentangle this from concerns about growth in emerging markets and financial market volatility," NAB said.
ANZ economist Daniel Gradwell said the fall in business confidence coincides with the fall in forward looking economic indicators such as purchasing manager's indexes, pointing to weaker global economic growth.
"It appears that Australian businesses are still sensitive to overseas conditions," he said.
"Although it is still early days for the new government, this is a disappointing result."
However Mr Gradwell said it is encouraging that the NAB business conditions index - based on measures of trading conditions, profitability and employment - is still high, only a couple of points below the highest levels seen since the global financial crisis in 2008.
"While profitability has eased a little, it remains at a high level and bodes well for near-term employment growth," Mr Gradwell said.
JP Morgan economist Ben Jarman said the short lived Turnbull bump in business confidence is to be expected but believes that solid business conditions are a better indicator of what the economy will do.
"The NAB reports better outcomes in the services sectors at the expense of exports, goods and goods distribution, consistent with our view that the currency decline is forcing a pivot toward stronger activity in the non-traded sector," he said.
"Interestingly though, employment intentions have also started to perk up in local retail over the last few months."
