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US Consumer Confidence on the Rise - 2001-12-28


A widely followed index of consumer confidence in the United States is up sharply this month reversing three straight months of decline.

The Confidence Index, prepared by the Conference Board business research group, rose almost nine points to 93.7 in December. The index is pegged to a 100 point base, meaning any reading near 100 or above signals economic expansion.

The terrorist attacks dragged the confidence index down dramatically in September, October and November. However, Conference Board economist Delos Smith says the December figures indicate a real turnaround in U.S. consumer sentiment. "You have to have a turning point. I am starting to see a nice turning point," he said. "The deterioration is behind us, the news from Afghanistan is positive and people are not as numb."

A key factor in consumer confidence is jobs and the latest survey shows a rising number of people who believe jobs will become more available within the next six months.

Because consumer spending represents two-thirds of the U.S. economy, the confidence index is followed closely by economists and Wall Street analysts. The index is determined through a survey of 5,000 U.S. households each month.

A further sign of economic strength comes from a Commerce Department report that says new home sales in the United States rose by more than six percent in November. That was the largest monthly increase in almost a year.

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