WRAPUP 2-U.S. consumer confidence slips; home prices decline

* Consumer confidence slips in December

* Oct home prices down for 4th straight month

* US retail sales spike week before Christmas-ISCS/GS
(Adds details, comment, adds byline)

By Wanfeng Zhou

NEW YORK, Dec 28 (BestGrowthStock) – U.S. consumer confidence
unexpectedly deteriorated in December, while prices of
single-family homes fell almost double the expected pace in
October, tempering growing optimism on the economy’s recovery.

The latest data was at odds with other signs suggesting the
economic recovery is accelerating and a separate report last
week showing consumer sentiment in December at its highest
level since June.

Concern about the jobs market pushed an index of consumer
attitudes to 52.5 in December from 54.3 in November, the
Conference Board said on Tuesday. That was below the median of
forecasts from analysts polled by Reuters for a reading of
56.0. For more details, see [ID:nN28126497]

“U.S. consumers are still worried about high unemployment,
housing market stagnation and the generally meager growth
they’ve seen so far,” said Kathy Lien, director of currency
research at GFT in New York.

Consumers’ assessment of the labor market worsened in
December after data at the start of the month showed the
unemployment rate jumped in November to a seven-month high of
9.8 percent.

The “jobs hard to get” index of the sentiment survey rose
to 46.8 percent in December from 46.3 percent last month, while
the “jobs plentiful” index dropped to 3.9 percent from 4.3

Financial markets showed a muted reaction to the consumer
and housing data, with traders citing very thin post-Christmas

Despite the overall drop in confidence, Troy Davig, senior
U.S. economist at Barclays Capital in New York, said confidence
rose for individuals earning more than $50,000, which likely
reflects the recently passed tax extension package.

The tax deal has helped fuel optimism about the recovery,
with economists expecting it to lift growth next year by as
much as 1 percentage point. The economy is also getting
monetary support from the Federal Reserve’s planned purchases
of $600 billion in government debt.

Another report on Tuesday showed U.S. single-family home
prices fell for a fourth straight month in October, pressured
by a supply glut, home foreclosures and high unemployment.

The Standard & Poor’s/Case-Shiller composite index of 20
metropolitan areas declined 1 percent in October from September
on a seasonally adjusted basis, much steeper than the 0.6
percent decrease economists expected. [ID:nN28245698]

The housing market has been struggling since home-buyer tax
credits expired earlier this year. With the number of
foreclosures expected to top a million in 2010, many economists
expect the index to drop further in the coming months.


Some economists cautioned against reading too much into one
month’s figures and said the surprising drop in consumer
confidence does not signal a meaningful shift in the outlook
for spending.

“We stress that month-to-month changes in consumer
confidence are not well-correlated with those in consumer
spending,” Barclays’ Davig said. “Retail sales and real
consumption expenditures have been gaining momentum going into
the holiday shopping season, and reports from retailers on
holiday sales have been generally upbeat.”

U.S. retail sales rose in the week before Christmas,
putting holiday sales on track to hit the high end of
estimates. Data released on Tuesday by the International
Council of Shopping Centers and Goldman Sachs showed retail
sales rose 4.8 percent for the week ended Dec. 25 compared with
the year-earlier period. [ID:nN28244004]

Optimism about the economy has grown after recent reports
on jobless claims, durable goods and consumer spending
suggested the economy perked up a bit in the fourth quarter and
appears to be entering the new year with a relatively decent
amount of momentum.
(Editing by Dan Grebler)

WRAPUP 2-U.S. consumer confidence slips; home prices decline