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U.S. consumer confidence rises as jobs are added

NEW YORK — Americans are gaining faith that the economy is on the upswing.

An improving job outlook helped the Consumer Confidence Index soar to its highest level since April and near a post-recession peak, according to a monthly survey by the Conference Board.

The second straight monthly surge coincided with a decent holiday shopping season for retailers, though stores had to heavily discount to attract shoppers.

The rise in confidence jibes with a better outlook for the overall economy. An Associated Press poll of three dozen private, corporate and academic economists projects U.S. economic growth will speed up in 2012, if it isn't derailed by upheavals in Europe.

But confidence is still far below where it is in a healthy economy. And Americans' mood could sour again if the debt crisis in Europe deepens and spreads to the United States. Shoppers still face big obstacles — higher costs on household basics and a still-slumping housing market.

"This is encouraging. It's good to be talking about improvement," said Mark Vitner, an economist at Wells Fargo. "But there is still a lot of room for trouble."

The Conference Board, a private research group, said Tuesday that its Consumer Confidence Index rose almost 10 points to 64.5 in December, up from a revised 55.2 in November. Analysts had expected 59. The level is close to the post-recession high of 72, reached in February.

The December surge builds on a big increase in November, when the index rose almost 15 points from October. That month's reading was the lowest since March 2009, the depths of the recession.

One component of the index that measures how shoppers feel now about the economy rose to 46.7 from 38.3 in November. The other barometer, which measures how shoppers feel about the next six months, rose to 76.4 from 66.4.

Americans have more reason to be optimistic.

The economy has produced at least 100,000 new jobs five months in a row, the longest such streak since 2006. The number of people applying for unemployment benefits has dropped to the lowest level since April 2008.

Based on the stronger-than-expected start and rising optimism that more spending was to come in the finale, the National Retail Federation earlier this month upgraded its holiday sales growth forecast to 3.8 percent, from the original forecast of 2.8 percent made in September.

More data will be released this week that will help quantify the last-minute sales surge.

U.S. consumer confidence rises as jobs are added 12/27/11 [Last modified: Tuesday, December 27, 2011 9:50pm]
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