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Good news is already starting to surface on the U.S. economic front, even as some indicators like housing prices continue to fall. From a consumer’s viewpoint, there is more optimism showing as businesses celebrate the first decent holiday season since the start of the recession. Consumer confidence is jumping to an eight-month high as reported by the Conference board last Tuesday. This is definitely the type of news that makes for a Happy New Year.

Labor Market Improvement

Most experts believe the improving job market is responsible for the consumer’s sudden shift in mood. Unemployment has fallen to a 2.5 year low. The number of new jobless requesting benefits is also at its lowest level since 2008. While job growth is still not as robust as many would like, the fact that layoffs have stopped and hiring is increasing is a very positive sign that is hard to ignore. It also seems that consumers are willing to celebrate by spending just a little more this holiday season than in years’ past. That’s because they are feeling more positive about their income in 2012. The percentage of consumers who expect an increase in their pay in 2012 rose to 17.1 percent from 14.1 percent last November.

Housing Demand Increasing

House prices may still be falling in some areas, but it doesn’t mean the housing market is still on life support. There is an uptick in demand and home sales volume has also shown an increased in the last two months. New home construction, which was non-existent during the recession, is also showing signs of life. Experts predict that when the labor market recovers substantially, it will also help the housing market recover. Key components like labor, wages, and consumer confidence are spelling good news for not only the end of the year, but also for 2012 as well.