WASHINGTON, Dec 28 (AFP) - US consumer confidence took the biggest leap in 14 months in December, ending a five-month slide and raising hope for economic expansion in 2005, the Conference Board said Tuesday.
The private research group's consumer confidence index, compiled from a survey of 5,000 households, soared 9.7 points to 102.3 -- the highest level since August.
It was the steepest increase since October 2003.
Confidence is crucial because consumer spending accounts for two-thirds of economic activity.
"The continuing economic expansion, combined with job growth, has consumers ending the year on a high note," said Conference Board consumer research chief Lynn Franco.
"The most significant contributor to the rebound in confidence has been the overall improvement in current conditions over the past 12 months," she said in a statement.
"And consumers' outlook suggests that the economy will continue to expand in the first half of the year."
A breakdown of the report showed an index of confidence in current conditions leapt 9.6 points to 105.9 and an index of expectations for the future shot up 9.7 points to 99.9.
Consumer confidence is scrutinized for the impact it may have on spending, and the latest figures dovetailed with signs of a last-minute Christmas spending splurge.
Major US retail chains reported a three-year record gain in weekly sales as shoppers scrambled for gifts.
Sales soared 2.7 percent in the week ended December 25, adding to a rise of 1.6 percent the previous week, according to a survey by the International Council of Shopping Centers (ICSC) and UBS Warburg.
It was the steepest gain since December 2001. Compared with a year earlier, sales were up 4.3 percent.
On Monday, Wal-Mart, the world's biggest retailer, reported surprisingly brisk post-Christmas sales.
"For the Sunday after Christmas, sales were over our plan (forecast)," Wal-Mart said in a weekly sales update.
In the five weeks to December 31, sales at Wal-Mart stores operating for at least a year were expected to be up "in the middle of our one-to-three-percent range," it said.
Job gains were pivotal to the boost in confidence.
The share of consumers saying jobs were "plentiful" rose to 19.4 percent from 17.1 percent, while those saying jobs were "hard to get" dipped to 26.4 percent from 28.0 percent, the Conference Board said.
Looking six months ahead, the proportion expecting fewer job openings fell to 15.5 percent from 19.3 percent. But those anticipating more opportunities eased, as well, to 16.2 percent from 17.6 percent.
The indications of strengthened consumer confidence tallied with signs of a late boom in pre-Christmas shopping.
In November, the US economy generated just 112,000 jobs -- barely more than half the number expected on Wall Street -- after a surge of 303,000 in October, according to the latest data.
The unemployment rate dipped 0.1 percentage points to 5.4 percent.
12/28/2004 15:33 GMT - AFP