Certified public accountants expressed their highest level of optimism on the U.S. economy since the third quarter of 2007, according to the latest AICPA/UNC Quarterly Economic Outlook Survey, in which 1,168 CPAs were queried. In addition, the CPAs’ expectations for hiring and capital spending on IT and other areas improved slightly.

Forty-eight percent of CPAs serving in executive positions expressed optimism about the U.S. economy in the first quarter, up 20 percentage points from 28% in the fourth quarter. And 13% of companies expect to hire new employees in 2011, up from 11% who expected to hire in the next 12 months in the fourth quarter.

Further, 57% are either optimistic or very optimistic about the prospects for their own companies, and 66% expect their businesses to expand in the next year.

In addition, the survey introduced a new index to gauge a wide breadth of economic activity, the CPA Outlook Index. It now stands at 0.69, with a reading about 0.50 indicating a positive outlook.

“We see a substantial bounce in optimism about the economy for the first time in nearly three years,” said AICPA Vice President for Business, Industry and Government Carol Scott. “The new composite index shows positive movements across the board. However, this seems to be tempered by concerns about inflation.”

Fifty-five percent of the CPAs are now concerned about inflation, up 21 percentage points from the 34% who had these fears in the fourth quarter.

University of North Carolina Accounting Professor Mark Lang said: “The most striking feature is the consistency of optimism across all nine components of the Outlook Index. Respondents are optimistic about their own organizations as well as the economy as a whole and, most importantly, their optimism is translating into planned spending and employment increases. It appears that the recovery continues to accelerate.”