Consumer confidence rose to its highest level in five-and-a-half years amid optimism that the nation's economy is creating enough jobs, a private research group said Tuesday.
The New York-based Conference Board said that its Consumer Confidence Index rose to 112.5, up from a revised 110.2 in January. Analysts had expected the reading to be 109.
The February index was the highest since August 2001, when the reading was 114, indicating that consumers will continue to fuel the nation's economic growth in the near future.
Sales of existing homes rose in January by the largest amount in two years, raising hopes that the worst of the severe slump in housing may be coming to an end. Median home prices, however, fell for a sixth straight month. The National Association of Realtors reported that sales of previously owned homes rose by 3 percent last month, the biggest one- month increase since a 3.3 percent increase in January 2005, a time when housing was roaring toward the peak of its five-year boom. The median price of an existing home sold in January dropped to $210,600, a decline of 3.1 percent from a year ago. It marked the sixth straight month that the median price has been down compared with a year ago. The January decline was the third-biggest drop in history. Analysts said that the decline in prices was actually an encouraging sign that home sellers are starting to adjust their asking-price down and this should help speed the correction in housing.