NEW YORK (CNN/Money) - A closely watched measure of consumer confidence in the United States surged in January, according to a published report Friday, beating Wall Street expectations.
The University of Michigan's preliminary consumer sentiment index for January jumped to a revised 103.8 from 92.6 in December, according to market sources quoted by Reuters. Economists, on average, expected a reading of 103, compared with an initial reading of 103.2, according to Briefing.com.
It was the highest level for the index since 107.6 in November 2000, months before the official beginning of the last recession in March 2001.
The university's current conditions index, which measures the way consumers feel about the present state of the economy, surged to a revised 109.5, the highest since 110.5 in December 2000, from 97 in December.
The expectations index, measuring consumer's hopes for the near future, rose to a revised 100.1 from 89.8 in December.
U.S. stock prices improved slightly after the report and were mixed in early trading. Treasury bond prices were mostly higher.
Wall Street pays close attention to consumers, whose spending makes up more than two-thirds of the total economy. Fueled by tax rebate checks and cash from a wave of mortgage refinancing, consumers hit the malls with gusto in the third quarter, pushing economic growth to the fastest annual pace in nearly 20 years.
But those stimulative effects faded in the fourth quarter, and the pace of consumer spending growth slowed down. On Friday, the Commerce Department said consumption grew at a 2.6-percent annualized pace in the fourth quarter, well below the third quarter's 6.9-percent rate.
In any event, consumers don't always spend the way they feel. Confidence plunged after the terror attacks of Sept. 11, 2001, for example, but consumers still managed to make their way to auto dealers and buy cars at zero-percent financing.
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