Consumer confidence increased a modest 0.3% in January, according to the Conference Board Survey, following an upwardly revised 4.5% December gain. The increase was to the highest level since March 2002.

The reading of present conditions rose a firmer 2.6% after the 4.1% December increase as the percentage of respondents who viewed business conditions as good rose to 28.1%, the highest since last May. The percentage who viewed jobs as plentiful also rose to 29.9%, the highest since 2001.

Expectations, however, reversed nearly half of the December gain with a 1.9% decline. Expectations about future income fell the hardest, offset by an uptick in expected employment conditions.

The expected inflation rate in twelve months ticked lower to 4.7%, that was versus expectations during all of last year for a 5.1% rate of inflation in twelve months.

Monetary Policy Inertia and Recent Fed Actions from the Federal Reserve Bank of San Francisco can be found here.