One of the worrisome trends for the Australian economy had been the recent decline in consumer confidence. But as we reported last week, the June surge in retail sales suggested that consumer sentiment was perhaps more resilient than some economists had assumed.

Further evidence that this is the case came with the latest release of the Westpac-Melbourne Institute’s August survey of consumer sentiment.

The survey, which was based on a random selection of 1,200 adults polled over several days last week, showed a 3.8 percent rise month over month, to a reading of 98.5 from 94.9.

As Westpac chief economist Bill Evans succinctly put it, “That was a pleasing result.”

Consumer confidence hit a medium-term peak last September, which coincided with the conclusion of an unusually long election cycle. Respondents at the time were either relieved the country’s federal elections were finally over or hopeful about a new government’s ability to get the economy back on track.

Naturally, it was unlikely for such euphoria to persist, as economies don’t turn on a dime and the reality of governance always falls short of promises made while electioneering.

Indeed, in the months thereafter, consumer confidence began a protracted swoon, with sentiment bottoming in May, at 92.9, and only rising slightly in the two subsequent months.

In particular, consumers have been anxious about a difficult job market and a contentious federal budget.

From the standpoint of the overall economy, weakening consumer sentiment appeared to be flowing through to retail sales, which had enjoyed an unusually strong run from October through January, then essentially flat-lined for the next three months before an outright decline in May.

The Reserve Bank of Australia (RBA) has been hoping to ignite growth in the country’s non-mining sectors now that the resource boom has peaked and investment in that area is waning.

Like its counterparts in other sluggish developed-world economies, the RBA has kept interest rates at historic lows, with rate-sensitive sectors such as housing as obvious beneficiaries.

Outside of housing, retail had been one of the few non-mining sectors to demonstrate strength, so we were troubled when it declined earlier this year in tandem with slackening consumer confidence.

But the retail sector’s June rebound coupled with further evidence of strengthening sentiment more recently suggests that, while Australia’s job market remains difficult, consumers appear to have moved beyond their concerns about the tough federal budget.

As Westpac notes, consumer confidence is up 5.9 percent since its low in May and is only 1.2 percent below its level prior to the announcement of the federal budget. However, the index is still about 10.8 percent below its post-election peak.

Evans speculates that there are political factors that could be boosting confidence, such as the repeal of the country’s carbon tax, as well as opposition in the country’s Senate to some of the more unpopular budget measures.

Assuming budget negotiations don’t devolve into disorder, Westpac expects “the consumer to be running at a faster pace in the second half of 2014 than in the first, with some spillover to non-mining business investment and employment.”

According to Bloomberg, the current consensus among private-sector economists is for Australia’s gross domestic product (GDP) to grow by 3 percent in both the third and fourth quarters. Full-year growth is forecast to come in at 3.1 percent, which is a tenth of a point higher than the RBA’s estimate.

If Westpac is right about how consumers behave in the second half of the year, then the Australian economy’s performance could be even stronger.