It certainly wasn't the stock market, but consumers became more confident about the economy in January, according to a closely watched barometer of a business group.

The Conference Board said its headline index edged up to 103.4 in January from 102.7 in December. Economists expected a reading of 101.3.

In particular, the present situation index increased to 110.9 from 105.7, while the expectations index declined to 98.4 from 100.7.

"Despite the slight retreat in expectations, consumers' short-term outlook remains favorable and suggests the economy will continue to expand throughout the first half of this year," the business group said.

Consumers' overall assessment of current conditions improved in January, as did the employment picture. The percentage of those saying jobs are "plentiful" increased to 20.7% from 19.4%, while those saying jobs are "hard to get" fell to 24.7% from 26.4%.

Consumer confidence barometers have been somewhat erratic in the past year, reflecting periodic concerns about the job market and high energy prices.