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US consumer confidence: 15-year high

By Reuters | China Daily USA | Updated: 2016-12-28 11:43

US consumer confidence reached its highest level in more than 15 years in December.

Americans see more strength ahead in business conditions, stock prices and the job market following the election of Donald Trump as president in November.

House prices continued their steady recovery in October, although a spike in borrowing costs after Trump's Nov 8 victory could present a headwind to sustained home-value gains.

The Conference Board said on Tuesday its Consumer Confidence Index rose to 113.7 this month from an upwardly revised 109.4 in November. That topped estimates in a Reuters poll for a reading of 109.0, and was the highest since August 2001.

The gain in confidence was entirely due to rising expectations as consumers' assessments of current conditions dipped, and was led by surging optimism among older Americans, Lynn Franco, director of economic indicators at The Conference Board, said in a statement. The private economic forecasting group's Expectations Index hit its highest since December 2003.

The modest pullback in current conditions "still suggests that economic growth continued through the final months of 2016," Franco said. "Looking ahead to 2017, consumers' continued optimism will depend on whether or not their expectations are realized."

Benchmark US stock indexes have surged to record highs following the election, in which Republican Trump surprised most pre-election polls to defeat Democrat Hillary Clinton.

The S&P 500 has gained more than 6 percent since Election Day, while the blue chip Dow Jones Industrial Average has risen by nearly 9 percent to near the 20,000 mark. Small-cap stocks have outpaced both, with the Russell 2000 gaining 15 percent in the same run.

All three indexes were up modestly on Tuesday in light, post-Christmas holiday trading.

Interest rates also have risen on expectations that Trump's economic plans will accelerate growth and inflation and the Federal Reserve will ratchet up the pace of hikes to its benchmark overnight lending rate.

The Fed raised that rate earlier in December for the first time this year by a quarter percentage point, 0.50 percent to 0.75 percent, and at least two increases are expected in 2017.

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