NEW YORK - An improving jobs outlook pushed Americans' confidence in the economy up in December for the second straight month, a survey issued yesterday said.
Consumers' expectations for the job market in the next six months reached their highest in two years, but Americans remain gloomy about their current prospects.
A separate report yesterday showed that home prices rose in October for the fifth month in a row, but the recovery continued to be uneven, with only 11 of 20 metro areas tracked showing gains.
The Standard & Poor's/Case-Shiller home price index edged up 0.4 percent to a seasonally adjusted reading of 145.36 in October from September. The index is now up 3.4 percent from its bottom in May, but still nearly 30 percent below its peak in April 2006.
The Conference Board, a New York business-research organization, said its Consumer Confidence Index rose to 52.9 from a revised 50.6 in November. However, the reading is still far short of the 90 that would signify a solid economy or the 120 reflecting a strong economy. In October, consumer confidence was 48.7.
Economists surveyed by Thomson Reuters predicted a reading of 52 for December.
The index, which hit a historic low of 25.3 in February, had a three-month climb from March through May, fueled by signs the economy might be stabilizing. The road has been bumpier since June as rising unemployment has taken a toll on consumers.
Economists watch consumer confidence because their spending on goods and services accounts for about 70 percent of U.S. economic activity by federal measures.
One key component of the index that measures consumers' outlook over the next six months rose to 75.6 from 70.3 last month, the highest since December 2007, when the index was 75.8. But the survey's other main component, which measures shoppers' current assessment, actually fell to 18.8 from 21.2.
The survey of 5,000 households ran Dec. 1 through 21.
"Regarding income, however, consumers remain rather pessimistic about their short-term prospects and this will likely continue to play a key role in spending decisions in early 2010," Lynn Franco, director of the Conference Board Consumer Research Center said in a statement.
Even though shoppers saw their confidence improve slightly and bought a bit more during the holiday shopping season, they've been cautious in their spending. Experts say such patterns might remain for several years amid unemployment that could be stubbornly high.
The Conference Board survey showed that consumers' assessment of current conditions worsened in December. Those saying conditions are "bad" increased to 46.6 percent from 44.5 percent, while those saying business conditions are "good" decreased to 7.0 percent from 8.1 percent.