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Last Updated: Thursday, 27 December 2007, 16:02 GMT
Unexpected rise in US confidence
US shoppers
Consumer spending is the biggest driver of the US economy
Consumer confidence in the US has risen unexpectedly in December as people were more optimistic about employment, inflation and the outlook for business.

The index from the Conference Board showed its first rise for five months, going to 88.6 from November's 87.8.

While consumers were more optimistic about the future, their perception of the current situation deteriorated.

How consumers are feeling is important because consumer spending accounts for more than two-thirds of the US economy.

String of data

Analysts expected consumer confidence to fall, especially after a recent string of economic data pointed to sluggish economic growth.

Earlier on Thursday, the Commerce Department reported a weaker-than-expected increase in durable goods orders, while the Labor Department said the number of workers seeking unemployment rose surprisingly last week.

At the same time, according to the Standard & Poor/Case-Shiller national index published on Wednesday, prices of existing US single-family homes recorded their biggest annual drop in October.

The consumer confidence data meant that US stock indexes bounced back slightly from earlier losses.

"All in all, the market has an eye what is going on in Pakistan, with the murder of [Benazir Bhutto] and in addition, an oil inventory coming out... So the economic numbers are probably being put on the back burner," said Brian Tailor, senior currency trader at M&T Bank.

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