WASHINGTON DC, United States — Consumer confidence hit an eight-month high in January. The increase suggests the rising spirits that fueled a holiday shopping boom are carrying over into the new year as Americans feel better about the job market.

The Conference Board said yesterday its Consumer Confidence Index climbed to 60.6 this month from 53.3 in December.

While confidence is still far from the 90 that signals a healthy consumer mindset, the January improvement was better than expected. Some economists said the big tax relief package Congress passed in late December may have helped.

“So much for a ho-hum January,” said Jennifer Lee, senior economist at BMO Capital Markets. “The signing of the stimulus bill and all that it is intended to bring is buoying sentiment.”

The US$858 billion package extended the Bush-era tax relief at all income levels for two years, provided tax breaks for businesses and reduced Social Security payroll taxes by two percentage points this year. The Social Security reduction will mean an estimated US$1,000 in additional after-tax income for the average family, according to White House estimates.

Other analysts suggested that the recent gains in the stock market and improving labor market conditions were trumping higher gasoline prices and falling home prices. The Standard & Poor’s/Case-Shiller 20-city index showed home prices falling in most of America’s largest cities and hitting their lowest point since the housing bust in eight markets.

“The recovery in stock prices and the beginnings of an improvement in the labour market are making people feel better about the economy,” said Ian Shepherdson, chief US economist at High Frequency Economics.

The January confidence figure was the highest last May’s 62.7. At that time, consumer attitudes were improving as economic growth seemed to be taking off. However, the economy stalled in the summer, and so did confidence.

Confidence has been depressed by unemployment that surged during the country’s worst recession since the 1930s and has stayed stubbornly high even though the downturn ended in June 2009. Confidence has not been above 90 since the recession began in December 2007.

In the Conference Board survey, the percentage of people surveyed who felt jobs were hard to get fell slightly to 43.4 per cent from 46 per cent in December. The share who expected to see more jobs six months from now rose to 16 per cent from 14.2 per cent.

That finding supported a separate report Monday from the National Association for Business Economics that showed the number of firms expressing positive views on hiring had climbed to the highest level in 12 years.

While confidence has stayed weak since the recession ended in summer 2009, consumer spending has been picking up. During the 2010 holiday shopping season, sales increased at the fastest rate in six years.

Economists are hoping that consumer confidence will keep rising in 2011 as the economy improves and unemployment declines.

Employers added 1.1 million jobs for all of 2010, but the nation still has 7.2 million fewer jobs than it did in December 2007, when the recession began. Many economists expect the nation will create twice as many jobs this year as it did last year as economic growth picks up.

The Conference Board confidence index was based on answers to questions from a survey of 5,000 US households taken through Jan 18.