U.S. consumer sentiment improved in January to the highest level since the summer of 2021 amid optimism over the outlook for inflation and household incomes, a survey showed Friday.

The University of Michigan's preliminary reading on the overall index of consumer sentiment came in at 78.8 this month, the highest reading since July 2021, compared to 69.7 in December. Economists polled by Reuters had forecast a preliminary reading of 70.0.

"Consumer views were supported by confidence that inflation has turned a corner and strengthening income expectations," said Surveys of Consumers Director Joanne Hsu in a statement.

The survey's reading of one-year inflation expectations fell to 2.9% this month from 3.1% in December. Its five-year inflation outlook slipped to 2.8% from 2.9% in the prior month.