Consumer Confidence Rose More Than Forecast

Confidence among consumers rose to an eight-month high in December as an improving job market helped Americans regain all the ground lost following the mid- year government budget battle and credit-rating downgrade. The Conference Board’s index increased to 64.5, exceeding all estimates and the highest since April, from a revised 55.2 reading in November, figures from the New York-based private research group showed. Another report showed home prices fell more than projected in October. Unemployment that dropped last month to its lowest in more than two years and the cheapest gasoline since February are prompting households to take advantage of discounts during the holiday shopping season. The improvement in sentiment may help sustain household purchases, which account for about 70 percent of the economy, into the new year. “A large part of the problem in the economy is one of confidence, and to the extent that sentiment begins improving it would be a positive for growth,” said Dana Saporta. “There are still a lot of headwinds out there, including the continued decline in home prices.”