The index, which slipped in September and November and dropped sharply in October, rose dramatically from 72 in November to 78.1 in December.
The index assigns the average 1985 level a base level of 100. For comparison, the sharp decrease in October dropped the index from 80.2 to 72 in November.
The index fell sharply in the month of the partial government shutdown, which occurred at the start of the holiday gift-buying season, which is critical for the survival of retail businesses.
In December, the Present Situation Index rose from 73.5 to 76.2, while the Expectations Index, which measures confidence in the economy six months down the road, rose from 71.1 to 79.4, the Conference Board said.
In the monthly survey that involved more than 5,000 households, the percentage of respondents who indicated they believe business conditions were "good" edged down from 20.4 percent to 19.6 percent, while those indicating a belief that business conditions were "bad" decreased from 24.6 percent to 22.6 percent.
The percentage of respondents indicating jobs were "plentiful," rose slightly from 12 percent to 12.2 percent, while those indicating jobs were difficult to get fell from 34.1 percent to 32.5 percent.