In December, advisor confidence in the U.S. economy and stock market reached its highest mark since February 2007, according to the Advisor Confidence Index, a benchmark that gauges advisor views, which was released on Monday.

The index jumped to 116.13 in December, an increase of about 4% from November. 

All four measures of the ACI increased in December, with the 12-month economic outlook soaring 7.2%. The current economic outlook increased 4.5%, the six-month outlook jumped 2.12% and the stock market outlook rose 1.97%.

“The economic recovery should extend at least through the 2nd quarter of 2011 and late cycle sectors like energy are poised to do very well,” said Rob Siegmann of Financial Management Group, in a statement. “Consumers are more optimistic and that is showing in better holiday sales figures. We are expecting to see a stronger stock market in 2011 with the 3rd year in the recession and 3rd presidential year,” added Jim Elder of ElderAdo Financial, in a statement.

The Conference Board Consumer Confidence Index increased in both October and November, but then fell to 52.5 in December from a revised 54.3 in November.

But it is clear there is still uncertainty about 2011. Unemployment is very high and there is a lack of spending and investment from businesses. 

The Fed’s recently announced QE2 should be seen as a sign that the Fed fears deflation and high unemployment more than any inflationary signs in the economy, said George Cheatham, American Financial Consultants Inc.

The reality is that although advisors and consumers are becoming more optimistic there is still a long way to go before we can say we have reached an economic recovery.