The failure of the US government to pass a budget by the end of its financial year was a factor in a small fall in local consumer confidence in October.

The Westpac/Melbourne Institute index of consumer sentiment in October fell 2.1 per cent to 108.3 points, seasonally adjusted.

It has stayed above 100 points for the second month in a row, indicating optimists outweighed the number of pessimists.

In September, the index jumped 4.6 per cent to its highest level since December 2010.

The only reason for Australians to be less confident than a month ago would be the US government shutdown which started on October 1, CommSec chief economist Craig James said.

The Westpac survey was conducted between September 30 and October 4.

"Every other development over the past month would have supported confidence levels including stable interest rates, firmer economic data, an end to election uncertainty and a stronger Aussie dollar," he said.

"Generally Aussies are feeling more comfortable and that positive frame of mind will be enhanced once US politicians finally come up with an agreement on their budget and a decision to lift the debt ceiling."

Westpac chief economist Bill Evans said a fall in confidence in October from an almost three-year high in September was to be expected, given the US government shutdown and risk of a debt default.

He said the survey showed there was not much improvement in consumers' expectations about their own finances for the coming year.

That index only improved 0.8 points from a year ago, which could indicate a reluctance by consumers to spend.

"This lack of response around people's assessments of their own finances raises some doubts as to whether the healthy reads of the overall index will spur consumers out of their current spending torpor," he said.

There was also a shock in whether it was a good time to buy a dwelling - that index fell by five points.

"This month's decline comes after reports of strong gains in house prices, particularly in Sydney, suggesting that deteriorating affordability and warnings by some commentators of the potential for a price bubble may be driving the shift in sentiment," Mr Evans said.