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Confidence at a record
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January 25, 2000: 12:10 p.m. ET
Measure of consumer optimism is highest ever; existing home sales slip
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NEW YORK (CNNfn) - U.S. consumer confidence surged to a record in January while sales of existing homes slipped in December, providing a mixed picture for investors about the progress of the U.S. economy - about to enter its ninth and record year of uninterrupted economic expansion.
The Conference Board Tuesday reported that its key consumer gauge rose to 144.7 in January from a revised reading of 141.4 in December, above Wall Street forecasts of 142. The numbers are often significant for financial markets because consumer spending accounts for about two-thirds of U.S. economic output. The index is based on a survey of 5,000 U.S. households.
Existing home sales, meantime, slipped in December, according to the National Association of Realtors, though still slightly above forecasts, pointing to residual strength in the housing market despite higher mortgage rates.
"The slowing trend in home re-sales is an indication that higher interest rates are taking effect slowly on
the economy," said Steven Wood, an economist with Banc of America Securities in San Francisco. Still, the consumer confidence numbers "suggest the unemployment rate will slip to 4 percent when it's released February 4," confirming that the economy is running at a "robust pace," he said.
Consumer confidence surges
The Board's gauge of how consumers assess their present conditions jumped to its highest level ever, rising to 182.4, from 181.7 in November. Its gauge of expectations for the next six months also rose,
rising to 119.7 in January from 115 the month before - its highest level in 16 years.
Overall confidence rose, even though fewer people said they expected their salaries to gain over the next six months. Roughly 25 percent of those surveyed in January expect their incomes to rise in six months, compared with almost 30 percent that expected a raise when surveyed a month before.
Those intending to purchase some type of major appliance declined to 27.7 percent from 30.6 percent a month earlier. The percentage of those planning to buy a car rose to 8.8 percent from 8.6 percent. The share of those planning to
buy a new or existing home, meantime, slipped to 3.2 percent, down from 3.9 percent last month.
The report was released as significant snowfall hit the U.S. Northeast, shutting down all federal government offices in Washington and postponing Federal Reserve Chairman Alan Greenspan's appearance before the Senate Budget Committee. Greenspan is still scheduled to appear before the Senate Banking Committee on Wednesday.
Heavy snow, leaking reports
The heavy snow had also prompted the National Association of Realtors to put off the release of December's existing home sales figures until tomorrow. However, after several data providers released the pre-gathered information to Wall Street investors, the NAR opted to confirm the numbers.
Sales of existing homes fell 1.4 percent in December to a 5.06 million rate, the NAR said, pointing to residual strength in the housing market despite higher mortgage rates. Analysts polled by Briefing.com had expected sales to ring in at a 5 million annual rate. From a year ago, sales rose 5.2 percent, the NAR said, the fourth yearly gain.
Next month will usher in the 107th consecutive month of U.S. economic expansion, an unprecedented event in U.S. history. The current record is 106 months of growth in the 1960s, between February 1961 and December 1969.
To keep the current expansion going, the Fed is widely expected to raise short-term lending rates by another quarter point at its Feb. 1-2 policy meeting to slow economic growth and ensure that inflation doesn't flare up. The Fed funds target rate -- which sets the trend for consumer and business lending -- currently stands at 5.5 percent. 
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