US consumer confidence bounces back

US consumer confidence rises
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Consumer confidence in the US, which had slipped in November, rebounded in December.

'Consumer confidence rebounded in December and is now close to pre-government shutdown levels' in September, Lynn Franco, director of economic indicators at The Conference Board, said in a statement.

The board’s Consumer Confidence Index was at 78.1 in December, up from 72.0 in November. The September level was 80.2.

Confidence in current conditions reached a 5-1/2-year high and was greater than it had been since April 2008.

'Looking ahead, consumers expressed a greater degree of confidence in future economic and job prospects, but were moderately more pessimistic about their earning prospects,' Franco said. 'Despite the many challenges throughout 2013, consumers are in better spirits today than when the year began.'

Home prices also rose again in October, although the pace of gains slowed, according to a Reuters report.

A separate report showed that the S&P/Case Shiller composite index of home prices in 20 metropolitan areas increased 13.6 percent in October from a year earlier, the strongest gain since February 2006.

Price gains on a monthly basis, however, slowed to 0.2 percent from 0.7 percent in September, suggesting that higher mortgage rates have slowed home-buying activity.

Borrowing costs are expected to rise again next year as the Federal Reserve winds down its monthly asset purchases, which have helped suppress long-term interest rates since the program began 15 months ago.

The housing market might see slower price appreciation in 2014, Wells Fargo Securities senior economist Mark Vitner told Reuters.

Even with higher borrowing costs, however, demand for accommodation is likely to keep supporting residential construction as it recovers from multi-decade lows.

A separate report Tuesday showed that business activity in the US Midwest slowed in December for a second straight month, a sign that manufacturing activity in the region was cooling off. Employment in the sector retreated to its lowest since April.