Why Americans are more confident about the economy [Video]

After years of high inflation and a looming recession that never quite happened, Americans are suddenly much more optimistic about the economy.

Positive sentiment about the economy has surged by 29% since the beginning of December — the largest two-month increase since 1991, according to the closely watched University of Michigan Surveys of Consumers.

This confidence is echoed by other recent metrics, including a survey by Morgan Stanley showing that consumer sentiment hit a five-month high in January.

Similarly, the percentage of American adults who expect their finances to be the same or better a year from now is 76.5%, the highest level since September 2021, according to a New York Federal Reserve study published Feb. 12.

So what’s changed in the last few months? Economists who spoke to CNBC Make It say it’s likely the cumulative effect of wage growth, low unemployment and slowing inflation. Some say stock market performance is a factor, too.

“If you look at where …