Household spending has picked up, but economists say it remains modest with people focusing on repaying debt.
Electronic card transactions, which include debit, credit and charge cards, show retail spending rose a seasonally adjusted 3% in August, the biggest increase in nearly a decade.
Higher fuel prices accounted for most of that, but Infometrics economist, Matt Nolan says that rising levels of spending on eating out and holidays shows people are feeling more confident.
Excluding fuel and car sales, core retail spending rose 1%, and ASB economist Christina Leung says households appear more confident about their lot.
"The gradual improvement we saw in retail sales over the first half of the year is continuing," Mr Nolan says.
"There was a surprisingly strong lift in hospitality spending and we also saw a bit of a pick-up in consumables ... which is an encouraging sign.
"When households are feeling comfortable enough to go and spend on holidays and to spend on meals out, it shows that they are actually feeling more comfortable about their financial situation, which is consistent with the confidence indicators we are starting to see."
People are spending more with their debit cards than their credit cards.
