U.S. consumer confidence (search) rose in January, registering the highest reading since last July as consumers registered optimism about the short-term outlook for the economy, a private business group said Tuesday.

However, their view of the economy's longer-term prospects was less rosy,

The Conference Board (search) said its gauge of consumer confidence rose to 103.4 in January, from 102.7 in December, surpassing economists' forecast for a January reading at 101.0.

"Despite the slight retreat in expectations, consumers' short-term outlook remains favorable om 105.7, its highest level since May 2002. The Expectations Index, however, slipped to 98.4 from 100.7.

In a sign that they felt a little more hopeful about the job growth picture, consumers saying that jobs are "plentiful" increased to 20.7 percent in January from 19.4 percent in December, while those saying that jobs were "hard to get" fell to 24.7 percent from 26.4 percent.

"Business conditions looked a little bit better and employment conditions looked slightly better, but not a lot," said Thayer. "Consumers are still cautious."

U.S. Treasury bond (search) prices fell slightly on the news.