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U.S. Consumer Confidence Hits Five-month High

More consumers expected better business conditions and job opportunities and higher income.

The Conference Board said its consumer confidence index rose for the second straight month to 54.1 in November, much better than the 52.0 expected. "Consumer confidence is now at its highest level in five months, a welcome sign as we enter the holiday season," said Lynn Franco, director of the firm's consumer research center.

The brighter outlook suggested consumers may be more willing to open their wallets further, despite high unemployment.

Retail sales are a big part of consumer spending, which drives two-thirds of U.S. economic activity and is key to boosting a tepid recovery.

Consumers' assessment of the current state of the economy and job market improved only slightly, by a half point to 24.0.

But expectations for the coming six months led the improved outlook. The expectations index surged 6.7 points to 74.2, the highest level since May.

More consumers expected better business conditions and job opportunities and higher income.

However, in grim news for the ailing housing market, plans to buy a home fell a half point to 1.7, matching a low last seen in December 2009. Also a leading measure of home prices showed broad-based declines in the third quarter after a rise in prior quarter. The S&P/Case-Shiller national home price index dropped 2% in July-September, after having risen 4.7% in the second quarter. Third-quarter prices were 1.5% below their year-ago levels.

Scott Hoyt at Moody's Analytics noted that the Conference Board's consumer confidence index remained within its recent range and below the May high of 57.7. While the November increase was positive, "confidence remains weak and is not supporting spending," he said.

Copyright Agence France-Presse, 2010

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