Consumer confidence is at its highest level in nearly four years, accroding to the latest ANZ-Roy Morgan consumer confidence index.
The index went up six points in November, rising to its highest level since January 2010.
Meanwhile, retail sales figures for the three months were flat and weaker than market expectations.
Official figures show the value of retail sales rose a seasonally adjusted 0.6% to more than $18 billion in the September quarter, compared with the previous quarter.
Excluding price changes, the volume of retail sales rose 0.3%. Core retail sales, which exclude vehicle-related industries, fell a tenth of a percentage point.
ANZ Bank chief economist Cameron Bagrie says consumer optimism should serve the retail sector well in the run up to Christmas.
He says retailers have been having a tough time in the last few years and are likely to take a bumper Christmas as a positive sign.
Mr Bagrie says the retail sales figures in the three months to September were reasonable but not strong, but the figures for the June quarter were very positive.
He says retail spending in the last 12 months has been running at about 4% - a respectable figure when compared to household income growth which is not much higher.
Mr Bagrie says the challenge for New Zealand is to get the earnings potential for the economy firing.
