The overall IIB Bank/ESRI Consumer Index improved in July to 96.6 compared to 90.1 for June, as consumers became more positive about the outlook for the economy and employment prospects.
The rise takes the index to its highest level in three years with one in three consumers now expecting the economic situation to improve over the next 12 months.
The forward looking sub-index, the expectations index, rose to 93.6 in July, from 86.3 in June.
Austin Hughes of IIB Bank said: 'A further improvement in sentiment towards the jobless market suggests employment prospects have brightened considerably of late and hints that unemployment will continue to trend lower in coming months'.
He added that while July's reading is consistent with a continuing upswing in Irish economic activity we are still in the foothills of a recovery rather than on the threshold of a consumer spending boom.
