RJ and Makay

U.S. consumer sentiment is at its highest point in three years, suggests the latest reading of the Consumer Confidence Index (CCI). The CCI rose to 70.4 this month, up from 64.8 in January as Americans expressed more optimism about their earning potential and the direction of the economy. It's the strongest CCI reading since the early days of the latest recession in 2008.

Several factors are helping to boost consumer sentiment such as a robust stock market, falling unemployment, and rising incomes. "Since November there has been a gradual improvement in the consumer mood, but it's not happy days are here again," warns economist Chris Christopher of IHS Global Insight. "Household net worth is still about $10 trillion below its peak, and with what's going on in the housing market, it doesn't look like that's going to improve anytime soon."

No one's promising a rose garden, but economists do seem increasingly optimistic. According to a Reuters poll released today, the consensus for 2011 among 80 economists surveyed is for overall GDP growth of 3%, up from the 2.7% forecasted in December and the 2.3% predicted in November.

Growth expectations for the first and second quarters of 2011 also rose dramatically, to 3.2% from 2.7% and 2.8%, respectively, in last month's poll. "The upgrade in view has been due to better data, more fiscal stimulus in 2011 than we had expected — particularly the payroll tax cut which was not anticipated — and analysis that suggested households have now increased saving," says Goldman Sachs economist Andrew Tilton.