Higher household spending, strong job gains, rising house prices, an improved Purchasing Managers' Index, growing gross domestic product, along with an increase in employment, has boosted National Australia Bank's (ASX:NAB) confidence in its forecast of a gradual pickup in the country's economic growth, the bank said in a Thursday statement.

The bank sees unemployment rising to 4.4% by the end of the year, then fall to about 4.25% next year, while expecting inflation to settle around 2.5%.

NAB expects growth to improve in 2026 and the outlook to get better if similar strong domestic data keeps flowing in.