US consumer confidence goes up, realty sags

Washington | Updated: Dec 29 2011, 08:22am hrs
Improving labour market conditions lifted US consumer confidence to an eight month high in December, but persistently weak house prices remain an obstacle to faster economic growth.

Sharp rise in sentiment reported by the Conference Board on Tuesday offered hope for a pick-up in consumer spending after an anemic performance in November. It suggests there is real improvement in the economy. Consumer confidence really boils down to how people feel about the labour market, said Mark Vitner, senior economist at Wells Fargo Securities in Charlotte, North Carolina.

The Conference Board's index of consumer confidence rose to 64.5 this month from 55.2 in November, beating economists' expectations for a reading of 58.3. A separate report from Standard & Poor's/Case-Shiller showed house prices in 20 major metropolitan areas declined 1.2% on an unadjusted basis in October after falling 0.7% the prior month. Other data offered a mixed picture of manufacturing this month, with the Dallas Federal Reserve saying factory activity weakened in its region.

Manufacturing in the central Atlantic region firmed after being flat in November as new orders and shipments increased, offsetting a modest decline in employment, the Richmond Fed said. Still, consumers are increasingly upbeat.