This confidence is echoed by other recent metrics, including a survey by Morgan Stanley showing that consumer sentiment hit a five-month high in January.
Economists who spoke to CNBC Make It say it's likely the cumulative effect of wage growth, low unemployment and slowing inflation.
"But with slowing inflation and strong wage growth, adjusted-for-inflation incomes are increasing, giving consumers more buying power," he says.
Wages increased 5% in January 2024, a three-month moving average of nominal wage growth for individuals, as measured by the Atlanta Fed's Wage Growth Tracker.
Wage growth, slowing inflation and low unemployment are the main factors for improved optimism among Americans, Ernest says.
Persons:
Morgan Stanley, what's, Robert Johnson, Here's, Gus Faucher, Johnson, Jonathan Ernest, Ernest
Organizations:
of Michigan, Consumers, New York Federal Reserve, CNBC, Creighton University's Heider College of Business, PNC Financial Services Group, U.S . Department of, Treasury, Federal Reserve, Stock, Case Western Reserve University
Locations:
New, Atlanta