"It's a picture of a market that's trying to get back to equilibrium," Karl Case, co-creator of the index, said today in an interview on Bloomberg Radio. "Different things are happening in different markets. It's very segmented. You've got these huge inventories that we've never really had before."

Present Conditions

The Conference Board's confidence data showed a measure of present conditions increased to the highest level since September 2008. The measure of expectations for the next six months also climbed.

The share of consumers saying jobs were plentiful rose to the highest since January 2009, while those saying employment was hard to get decreased to the lowest since the same month.

Confidence slumped in August when S&P stripped the U.S. of its AAA credit rating after congressional gridlock on raising the debt limit almost forced a government shutdown and brought the nation to the brink of default.

Americans will be helped by Congress' decision last week to pass a two-month payroll tax cut extension, eight days before its scheduled expiration. Yet fiscal policy uncertainty remains as congressmen are debating measures to cut the budget deficit by $1.2 trillion over 10 years.

The labor market has gained traction in recent weeks, gasoline prices have fallen and stocks have climbed as European leaders worked to resolve their debt crisis, helping revive confidence.

Fewer Firings

Initial claims in the week ended Dec. 17 declined by 4,000 to 364,000, the lowest level since April 2008, while those continuing to receive benefits fell by 79,000 to 3.55 million in the prior week, the lowest since September 2008.

The unemployment rate in November fell to 8.6 percent, the lowest since March 2009, while the S&P 500 gained 9.2 percent from Nov. 25 through Dec. 23.

A gallon of regular unleaded gasoline fell to $3.21 on Dec. 20, the lowest since February, according to AAA, the nation's largest automobile association.

Holiday sales will rise 3.8 percent, compared with a 5.2 percent advance last year, according to the Washington-based National Retail Federation.