Declining gas prices and increased prospects for jobs and wages drove consumer confidence to an eight-year high in December, a new survey shows. At 93.8, the preliminary reading on the consumer sentiment index prepared by Thomson Reuters/University of Michigan represented the highest tally since January 2007. It soared past economists’ median prediction of 89.5 and trounced November’s 88.8 showing.  

The powering up in consumer confidence occurred amid a precipitous – and ongoing – drop in gas prices, and as the unemployment rate in the U.S. dipped below 6% in recent months. "Expected wage gains rose to their highest level since 2008, and consumers voiced the most favorable buying attitudes in several decades," survey director Richard Curtin said in a statement.

All that good feeling could translate into a strong holiday shopping season and carry over into the new year, analysts say. That’s a distinct possibility given that the survey’s gauge of consumer expectations also hit an eight-year high, rising from 79.9 last month to 86.1 in December. Meanwhile, the survey’s reading on current economic conditions increased too, jumping from 102.7 to 105.7 – a tally not seen since February 2007.

The index’s one-year inflation expectation rose to 2.9% from 2.8%, while its five-year inflation outlook also rose to 2.9% from 2.6% last month.