Westpac senior economist Donna Purdue says expectations of better pay and improved job security paint a picture of a strengthening labour market.
The latest Westpac McDermott Miller employment confidence index for the three months to December edged up less than a point to 103.5.
A reading above 100 indicates there are more optimists than pessimists.
Ms Purdue says the slight improvement is encouraging for the New Year.
"The key driver of the lift was around expectations of improved earnings next year and a small improvement in perceived job security," she said.
Ms Purdue says the index points to a strengthening labour market and a decline in the unemployment rate over the next few quarters.