NEW YORK - The Conference Board said yesterday that its consumer confidence index edged up to 110.3 in January - the highest in five years - from a revised 110.0 in December.

The January index, just about what analysts had forecast, suggested that consumers - buoyed by a solid jobs market and declining oil prices - will continue to be the engine behind the nation's economic growth in coming months.

At the same time, a measure of consumer expectations for the next six months dropped to 94.5 in January from 96.3 the month before, perhaps a signal that their optimism may dwindle on concerns that job and wage growth may slow.

"Looking ahead . . . consumers are not as optimistic as they were in December," said Lynn Franco, director of the New York business group's consumer research center. The bottom line, she said, is that the index suggests just "moderate improvement" in economic growth in early 2007.

This should ease fears at the Federal Reserve, which concludes a two-day meeting today to review its economic and interest-rate policy, said Anthony Chan, managing director and chief economist with JPMorgan Private Client Services, of New York.

"At the central bank, they're mainly concerned about the economy overheating," Chan said. "I think this report says they can sit and watch."

Still, he said, the economy will benefit in the short run from continued consumer spending because the latest figures "tell us that at the moment, the consumer is in a sweet spot thanks to improved labor-market conditions and lower oil prices."

The index, based on a survey of 5,000 U.S. households, is closely watched because consumer confidence often signals changes in spending trends. Consumer spending makes up about two-thirds of the U.S. economy.

January's index reading on consumer confidence was the highest since 110.7 in March 2002 and matched a reading of 110.3 in May 2002, the Conference Board said.

David H. Resler, chief economist with Nomura Securities International Inc., of New York, pointed out that January's reading was boosted by optimism about the job market, with nearly 30 percent of those surveyed saying jobs were plentiful.

"You're looking at a reflection of what is making consumers feel good," he said. "It tells you that the conditions that underpin things like consumer spending are pretty good, so people are going to spend."

The figures also showed "people are not quite as pessimistic about the car market as they were, but housing is still languishing."

Weakness in the housing market could be seen in another report issued yesterday. An index prepared by Standard & Poor's Corp. showed that the prices of single-family homes across the nation rose in November at the slowest rate in more than a decade, a further sign that housing will be a drag on the economy.

The slower housing market may be weighing on consumers' expectations about the future, the economists said.

The Conference Board's Expectations Index, which measures consumers' outlook over the next six months, dropped to 94.5 in January from 96.3 the month before.