Consumer confidence has slipped over concerns about the federal budget and taxes, but it's still around its six-month average.
Consumer confidence fell 2.2 per cent in March, reversing a 4.2 per cent jump in February, according to the Westpac/Melbourne Institute index of consumer sentiment released on Wednesday.
The index level fell to 99.1 in March to 101.3 in February.
Westpac chief economist Bill Evans says Australians are less concerned about global market turmoil and more focused on the federal budget and debate about tax changes.
"The highest levels of news recall were for items on budget and taxation," Mr Evans said.
"Perceptions of both topics were less unfavourable in March than in December."
However, Mr Evans said, confidence was still around its six-month average after lifting 8.3 per cent in the two months following September's change in the federal government leadership.
"It has broadly held those gains with today's reading off that high in November by 2.5 per cent, although we are now slightly back in the region where pessimists outnumber optimists," he said.
While consumers were 8.2 per cent more optimistic on economic conditions over the next 12 months, they were 2.5 per cent less optimistic about conditions over the next five years.
Confidence in the jobs market also declined, with The Westpac Melbourne Institute Index of Unemployment Expectations increasing 1.3 per cent in March.
"This measures respondents' assessments of the outlook for the unemployment rate so an increase indicates reduced confidence in the employment outlook," Mr Evans said.
The measure of whether consumers felt now was a good time to buy a home rose by 5.4 per cent, but it was still 13.1 per cent below the level it was a year ago.
UBS economist George Tharenou was optimistic about the headline figure, saying the trend in confidence levels remained broadly consistent with decent consumption growth in the months ahead.
CommSec economist Savanth Sebastien said the Australian dollar would support confidence over the medium term as well.
"For Aussie consumers, a stronger Aussie dollar means increased purchases on the internet and trips abroad," Mr Sebastien said in a note.
AMP chief economist Shane Oliver didn't expect Wednesday's figures to increase the chances of a rate cut.
"Today's consumer confidence and housing finance data, while soft, is unlikely to be enough to prompt the RBA (Reserve Bank of Australia) to act on its easing bias just yet," Dr Oliver said.
