Consumer confidence shot higher this month, to 110.7 which is nearly 6 points above Econoday's consensus range and confirms a similar jump in December's preliminary consumer sentiment index. Outside of July's 114.0, this is the best level for the consumer confidence index in nearly two years.

In an indication of strength for the December employment report, the percentage of consumers describing jobs as currently"hard to get" fell 2.4 percentage points to 13.2 percent. Those describing jobs as plentiful rose 2.1 percentage points to 40.7 percent.

The outlook for the jobs market is likewise favorable as fewer see fewer jobs six months out, at 17.2 percent vs November's 20.1 percent, and more see their income rising, at 18.7 vs 17.7 percent.

Some of the income optimism is tied to the stock market where bulls have suddenly pulled well ahead of bears, at 37.4 vs 28.0 percent. Boosting bullishness are interest rate expectations, with 18.5 percent of the sample seeing rates falling over the next year versus 15.5 percent in November. Inflation indications in the report edged lower.

And in a positive signal for holiday spending, buying plans are up sharply including for major appliances as well as vehicles and also homes.

These results point to rising momentum going into the new year and leave the Relative Performance Index at plus 21 to indicate that US data, on net, are safely ahead of expectations.

The consumer confidence index is expected to rise modestly in December, to a consensus 103.4 versus 102.0 in November which was a half point higher than expected and up from 99.1 October.

The Conference Board's confidence report surveys consumers on their assessments of the labor market, business activity, and their own financial conditions. The survey is conducted by Toluna, an online community platform. (Conference Board and Toluna)

The pattern in consumer attitudes and spending is often the foremost influence on stock and bond markets. For stocks, strong economic growth translates to healthy corporate profits and higher stock prices. For bonds, the focus is whether economic growth goes overboard and leads to inflation. Ideally, the economy walks that fine line between strong growth and excessive (inflationary) growth.

This balance was achieved through much of the nineties and, in large part because of this, investors in the stock and bond markets enjoyed huge gains. It was during the late nineties that the consumer confidence index hit its historic peak, reaching levels that were never matched during the subsequent 2001 to 2007 expansion nor during the long expansion following the Great Recession.

Consumer spending accounts for more than two-thirds of the economy, so the markets are always dying to know what consumers are up to and how they might behave in the near future. The more confident consumers are about the economy and their own personal finances, the more likely they are to spend. With this in mind, it's easy to see how this index of consumer attitudes gives insight to the direction of the economy. Just note that changes in consumer confidence and retail sales don't move in tandem month by month.