NEW YORK – Jan. 27, 2015 – The Conference Board's Consumer Confidence Index hit an almost seven-year high in January, rising about 10 points from its December reading to 102.9. The index – which gauges Americans' attitudes about the economy – is at its highest level since August 2007.

The index, which also rose in December from 93.1, is made up of two components and both rose. The Present Situation Index rose to 112.6 from 99.9, while the Expectations Index, which measures attitudes about personal economies six months from now, increased to 96.4 from 88.5.

"Consumer confidence rose sharply in January and is now at its highest level since August 2007," says Lynn Franco, director of economic indicators at The Conference Board. "A more positive assessment of current business and labor market conditions contributed to the improvement in consumers' view of the present situation. Consumers also expressed a considerably higher degree of optimism regarding the short-term outlook for the economy and labor market, as well as their earnings."

Consumers' assessment of present-day conditions was considerably more favorable in January than in December. Those saying business conditions are "good" increased from 24.7 percent to 28.1 percent, while those claiming business conditions are "bad" decreased from 18.9 percent to 16.8 percent.

Consumers were also much more positive in their assessment of the job market. Those stating jobs are "plentiful" increased from 17.2 percent to 20.5 percent. Those claiming jobs are "hard to get" decreased from 27.3 percent to 25.7 percent.

Consumers' optimism about the short-term outlook improved in January. The percentage of consumers expecting business conditions to improve over the next six months rose from 17.8 percent to 18.4 percent, while those expecting business conditions to worsen declined from 9.9 percent to 7.7 percent.

Consumers' outlook for the labor market was also more optimistic. Those anticipating more jobs in the months ahead increased from 14.6 percent to 16.7 percent, while those anticipating fewer jobs declined from 16.5 percent to 15.0 percent.

The proportion of consumers expecting growth in their incomes improved from 16.2 percent to 20.0 percent. However, the proportion expecting a decrease increased marginally, from 10.2 percent to 11.3 percent.

Nielsen conducts the monthly Consumer Confidence Survey, based on a probability-design random sample, for The Conference Board. The cutoff date for the preliminary results was Jan. 15.

© 2015 Florida Realtors®