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January's consumer confidence index better than expected

Consumer confidence rose past expectations in January, the third straight monthly increase as Americans begin to feel slightly better about business conditions and the job picture, according to a survey released yesterday.

The Conference Board's Consumer Confidence Index increased to 55.9 - the highest in more than a year but still relatively gloomy. That compares with 53.6 in December.

January's index was better than the expected 53.5 forecast by economists.

Economists watch confidence numbers closely because consumer spending accounts for about 70 percent of U.S. economic activity. It takes a reading of 90 to indicate an economy on solid footing and 100 or more to indicate growth.

The new figures still don't point to an end to the nation's economic woes anytime soon.

Meanwhile, home prices rose for the sixth straight month in November, fueled by tax credits for home buyers.

The Standard & Poor's/Case-Shiller 20-city home price index released Tuesday inched up 0.2 percent to a seasonally adjusted reading of 145.49. The index was off 5.3 percent from November last year, nearly matching analysts' estimates that it would fall by 5.1 percent.

Fourteen of 20 cities in the index showed gains from October to November. The New York area, which includes Long Island, showed a loss of 1 percent. The index is now up more than 3 percent from its bottom in May, but still 30 percent below its May 2006 peak.

Rising prices are important to the economic recovery because they make homeowners feel wealthier and lead them to spend more money. Price increases also help restore home equity for the one in four homeowners who currently owe more on their mortgages than their homes are worth.

- AP

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