US consumer confidence up in December

US consumer confidence rose for the first time in six months in December and posted its biggest gain in nearly four years as Americans wound down a grim year of war and recession with hopes for an economic rebound in 2002.

The Conference Board, a New York-based private research group, said its index of consumer confidence surged to 93.7 in December and revised up its November reading to 84.9 from a seven-year low of 82.2.

The surge was far above the 83.8 reading forecast by economists and the single-month gain was the largest since early 1998.

'The deterioration in economic conditions appears to be reaching a plateau, let by a stabilising employment scenario,' said Lynn Franco, director of the Conference Board's Consumer Research Centre.

'Consumers' short-term optimism is no longer at recession levels, and the upward trend signals that the economy may be close to bottoming out and that a rebound by mid-2002 is likely,' she said.

Economists closely track consumer confidence as a gauge of Americans' future spending, which drives two-thirds of US economic activity. It should come as a relief to US retailers, who, with the exception of large discounters, have suffered through a sluggish holiday sales season.

The improvement follows a fourth-quarter rally in the US stock market, relative success by US-led forces in the war in Afghanistan, and signs that the pace of job losses is easing somewhat.

The Conference Board said 17% of consumers surveyed rated the economy's present state as 'good,' up from 16.8% in November, but noted that those who viewed business conditions remain 'bad' rose to 21.7% from 20.7%.

Those rating jobs as plentiful edged up to 17.6% from 17.5%, while Americans saying jobs were hard to get dipped to 21.8% from 22.7%.

The Conference Board's Present Situation Index, which measures Americans' views of the economy right now, edged up to 96.9 in December from 96.2 in November.

And optimism that better times lie ahead in the coming six months helped propel the Expectations Index to 91.5 from 77.3 in November. The index is compiled from a survey of a representative sample of 5,000 US households.