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Conference Board says consumer confidence in the U.S. improved in December

Conference Board says consumer confidence in the U.S. improved in December

Consumer confidence improved to its strongest level in eight months in December after lackluster performance through the fall, but a private research group said Thursday it was too soon to determine if its reading was signaling genuine improvement.
The Conference Board said that its Consumer Confidence Index rose to 109.0 in December from a revised 105.3 in November and 105.1 in October.
The reading was the highest since the index registered 109.8 in April and was better than Wall Street anticipated. Analysts had been expecting a slight dip in the December reading to about 102.5.
Lynn Franco, director of the board's consumer research center, said in a statement accompanying the report that despite the reading "there is little to suggest that the pace of economic activity in the final quarter of 2006 is anything but moderately better than its uninspiring performance earlier this year."
She added: "Given the seesaw pattern in recent months, it is too soon to tell if this boost in confidence is a genuine signal that better times are ahead."
The reading, which is based on a survey of 5,000 U.S. households by the New York-based research group, is closely watched because consumer confidence often presages spending trends. Consumer spending makes up about two-thirds of the U.S. economy.
The stronger-than-expected December confidence performance _ along with good readings from Washington on employment and existing home sales _ sent the market down in morning trading as investors worried the strength could prompt the Federal Reserve to begin raising rates earlier to stem inflation.
The Consumer Confidence Index has been buffeted in recent months by concerns about higher fuel costs and job security. But fuel prices have edged down, and the job market has held up well.
Peter Morici, a professor of business at the University of Maryland in College Park, said the confidence numbers did not surprise him because consumer spending has picked up in recent months. Holiday shopping results, while not very strong by historical standards, "still were better than many expected," he said.
As a result, he expects that the U.S. economy may show growth of about 2.4 percent at an annual rate in the current quarter _ an improvement from the 2 percent pace of the third quarter.
In Washington on Thursday, the government said that the number of Americans filing applications for unemployment benefits edged up slightly last week but remained at a level indicating the job market is steady in spite of the slowing economy.
The Labor Department reported that 317,000 newly laid off workers filed for jobless benefits last week, an increase of 1,000 from the previous week. That was better than the rise of 8,000 that had been expected.
Also, a real estate trade group said that sales of existing homes managed to eke out a small increase in November but the price of homes sold fell for a record fourth consecutive month.
The Conference Board's Present Situation Index, which measures how consumers feel about current economic conditions, rose to 129.9 in December from 125.4 in November. The Expectations Index, which measures consumers' outlook over the next six months, improved to 95.1 in December from 91.9 the month before.
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Updated : 2021-05-09 22:45 GMT+08:00