The Conference Board, an industry group, said its index of consumer sentiment increased to 64.5 from a downwardly revised 55.2 in November.
Economists had expected a reading of 58.3 from a previously reported 56.0 in November.
The rise in sentiment offered hope for a pick-up in consumer spending after a tepid performance in November.
Labor market conditions have improved in recent months, with the unemployment rate falling to a 2-1/2 year low in November and applications for first time jobless benefits at the lowest since April 2008.
The survey's present situation index rose to 46.7 this month --- the highest since September 2008 -- from 38.3 in November. The expectations index surged to 76.4 from 66.4 in November.
"Consumers are more optimistic that business conditions, employment prospects and their financial situations will get better," the Conference Board said in a statement.
"While consumers are ending the year in a somewhat more upbeat mood, it is too soon to tell if this is a rebound from earlier declines or a sustainable shift in attitudes." (Reporting By Lucia Mutikani; Editing by Kenneth Barry)