Americans' confidence in the economy jumped in May to a five-year high, lifted by a better outlook for hiring and business conditions.
The increase suggests consumers may keep boosting US economic growth this year.
The Conference Board, a New York-based private research group, said its consumer confidence index rose in May to 76.2. That is up from a reading of 69 in April and the highest since February 2008.
The jump in confidence followed a separate report showing the housing recovery is strengthening.
Home prices jumped 10.9% in March compared with a year ago, the biggest gain since April 2006, according to the Standard & Poor's/Case Shiller 20-city index. All 20 cities showed year-over-year gains.
US consumers' confidence in the economy is watched closely because their spending accounts for about 70% of US economic activity.
Conference Board economist Lynn Franco said Americans are more optimistic after worrying earlier in the year about higher taxes and federal spending cuts.
Higher home prices and stocks gains are making Americans feel wealthier, which could offset some of the pinch from the tax increase and keep consumers spending. And the job market has improved steadily over the past six months.
The economy has added an average of 208,000 a month since November. That is well above the monthly average of 138,000 during the previous six months. The unemployment has fallen to a four-year low of 7.5%. But some of the decrease is because many people have given up looking for work. The government counts people as unemployed only if they are actively searching for a job.
The overall economy grew at an annual rate of 2.5% in the three months from January to March, up from a rate of just 0.4% in the three months from October to December.
The fastest expansion in consumer spending in more than two years drove economic growth in the first quarter.
Many economists expect US growth is slowing slightly in the current April-June quarter to a rate of between 2-2.5%. But there is hope among some economists that growth will strengthen in the second half of this year, boosted by the gains in housing and employment.
