U.S. consumer optimism about the economy has risen in the new year, bringing the consumer confidence index to its highest level in more than two years。In January, the University of Michigan's consumer confidence index rose 9.1 point, to 78.8, the biggest monthly increase since 2005 and far more than the most optimistic estimates from Bloomberg economists.。

The survey showed that one-year inflation expectations fell to 2 this month..9%, the lowest level since December 2020, down from 3.1%。Optimistic expectations of inflation may help sustain demand, keep the economy expanding。In addition, a more optimistic view of inflation may also give Fed officials peace of mind as they consider when to start lowering interest rates。

Increased consumer confidence across age groups, income groups, education, geographic location, and political affiliation。More than half of households expect their incomes to grow at least in line with inflation, the highest percentage since mid-2021.。

In addition, consumers "perception of their current financial situation reached its highest point in two years, and their expectations for future finances reached its highest point since 2021.。The evaluation of the purchase conditions of durable consumer goods reached the highest point in the past three years.。

Despite stronger consumer confidence, this doesn't necessarily tell us much about the economic outlook。But with confidence rebounding and inflation expectations falling, it's another sign of progress in a soft landing for the economy.。