Confidence among U.S. consumers unexpectedly fell in December

Confidence among U.S. consumers unexpectedly fell in December, restrained by community work will remain limited in 2011.

The confidence index fell to 52.5 Conference Board less than the most pessimistic forecasts and down from a revised 54.3 in November, the figures of the research group in New York, showed today day. The share of Americans saying jobs were hard to get rose to a maximum of 10 months.

The loss of confidence is at odds with a report from the University of Michigan showed that confidence improved to a maximum of six months in December, and the data showing the greatest increase in rental expense over five years. Federal Reserve policy makers have reiterated they will continue to inject money into financial markets in an attempt to maintain low interest rates, boosting growth and reducing unemployment.

"You're still seeing the labor market is the main concern for consumers," said David Semmens, a U.S. economist Standard Chartered Bank in New York. "It is a major concern for consumer spending."

The shares erased earlier gains after the report. 500 of Standard & Poor's fell 0.1 percent to 1,256.71 at 10:34 am in New York as the drop in confidence offset optimism about earnings of holiday spending. Treasuries fell, bringing the yield on the benchmark note 10 years to 3.38 percent from 3.33 percent yesterday afternoon.

Sales Rise

Retailers for 2010 holiday sales rose 5.5 percent for the best performance in five years, said SpendingPulse MasterCard Advisors, which measures retail sales in all forms of payment. That compares with a gain of 4.1 percent a year earlier. The figures include online sales and exclude purchases of automobiles.

The median forecast of confidence, based on a survey of 61 economists projected confidence increased to 56.3. The Conference Board revised the November figure to 54.3 from a previous estimate of 54.1. Projections ranged from 53 to 60. The average rate of 96.8 during the last economic expansion ended in December 2007.

The report highlighted today in contrast to preliminary figures from Thomson Reuters / University of Michigan showed confidence rose to a maximum of six months in December.

Fall Values

In a report today showed home prices fell more than expected in October, a sign of the housing will remain a weak link in the recovery accelerates in the new year. The S & P/Case- Shiller index of property values fell 0.8 percent from October 2009, the largest drop year after year, since December 2009. The decline surpassed the 0.2 percent.

The Conference Board's measure of sentiment on current conditions fell to 23.5 in December from 25.4 the previous month. The indicator of expectations for the next six months fell to 71.9 from 73.6 in November.

The percentage of respondents expecting more jobs to become available in the next six months declined to 14.3, lowest since July. The proportion of people who expect their incomes to rise over the next six months fell to 9.9 percent from 11.1 percent.

The proportion of consumers saying jobs are plentiful now fell to 3.9 percent this month, while those who said jobs are hard to get rose to 46.8 percent, the most since February.

Employment Earnings

Employers added 951,000 workers to payrolls in the first 11 months of the year, according to Labor Department figures. December data are due January 7.

The gains have not been large enough to reduce unemployment, which was 9.8 percent last month after the end of 2009 to 10 percent.

Barack Obama President on December 17 signed into law a bill that 858 billion U.S. dollars is spread over two years of the Bush cuts taxes for all income levels, continues to expand unemployment benefits to insurance payroll taxes long-term unemployed 13 months and reduced during 2011.

Some Americans are more willing to make some purchases of high cost. Car sales in November rose to 12.26 million unit pace, the highest since the government cash for clunkers program in August 2009, industry data showed this month. Demand in the past three months is the strongest in two years.

Increased confidence is helping to raise purchases of goods with high price call. Ford Motor Co. said sales of U.S. cars in December are running at a rate of 12 million units per year, and forecast sales could rise to nearly 13 million next year.

"We have a high degree of confidence that 2011 will be a strong sales year," said George Pipas, Ford sales analyst, in a December 20 information to reporters in Dearborn, Michigan, which has its headquarters company. "We are much better than they were a year ago."