US consumer confidence improved more than expected in January to its highest level in eight months, underscoring the brightening economic outlook, even though the housing market remains on shaky ground. The Conference Board said on Tuesday its index of consumer sentiment jumped to 60.6 in January, the highest since May, from 53.3 in December.
The index, which came in above economists' expectations for 54.3, reflected an improving outlook for employment and manufacturing, and a sense the economy is now on a firmer footing. "We're moving in the right direction and it is consistent with other evidence that the recovery is gaining some traction," said Zach Pandl, a US economist at Nomura Securities International in New York.
The government is expected to report on Friday that the economy grew at a solid 3.5 percent annual rate in the fourth quarter of last year, accelerating from the 2.6 percent pace in the July-September period. While other sectors of the economy are showing strength, recovery continues to elude the housing market. Single-family home prices fell for a fifth straight month in November, a separate report showed, and house values were set to drop further against the backdrop of a excess supply.