NEW YORK, USA — A more upbeat outlook on jobs pushed Americans’ confidence in the economy higher in December for the second month in a row, a survey released yesterday said.

Consumers’ expectations for the job market over the next six months reached their highest level in two years, but Americans remain gloomy about their current prospects.

The New York-based The Conference Board said its Consumer Confidence Index rose to 52.9, up from a revised 50.6 in November, but the reading is still far short of the 90 that would signify a solid economy. In October, consumer confidence was 48.7.

Economists surveyed by Thomson Reuters predicted a reading of 52 for December.

The index, which hit a historic low of 25.3 in February, had enjoyed a three-month climb from March through May, fuelled by signs that the economy might be stabilising. The road has been bumpier since June as rising unemployment has taken a toll on consumers.

Economists watch consumer sentiment because spending on goods and services for consumers accounts for about 70 per cent of US economic activity by federal measures.

One key component of the index that measures consumers’ outlook over the next six months rose to 75.6 from 70.3 last month, the highest level since December 2007, when the index was 75.8. But the survey’s other main component, which measures shoppers’ current assessment, actually fell to 18.8 from 21.2.

The survey of 5,000 households ran December 1 through 21.

“Regarding income, however, consumers remain rather pessimistic about their short-term prospects and this will likely continue to play a key role in spending decisions in early 2010,” Lynn Franco, director of The Conference Board Consumer Research Centre, said in a statement.

Still, many retailers are breathing sighs of relief after the holiday selling season turned out better than expected, according to one measure.

Retail sales rose 3.6 per cent from November 1 through December 24, compared with a 2.3 per cent drop in the year-ago period, according to figures released Monday from MasterCard Advisors’ SpendingPulse, which track all forms of payment, including cash.

Adjusting for an extra shopping day between Thanksgiving and Christmas, the number was closer to a 1 per cent gain.

Nevertheless, the spending bounce means retailers managed to avoid a repeat of last year’s disaster even amid tight credit and double-digit unemployment.

Even though shoppers saw their confidence improve slightly and bought a bit more, they’ve been cautious in their spending. During the Christmas season, they focused on practical items for loved ones and even for themselves, while shying away from buying gift cards and opting for deeply discounted items instead.

Experts say such patterns might remain for several years amid unemployment that could be stubbornly high.

The unemployment rate dipped in November to 10 per cent, down from a 26-year high of 10.2 per cent in October. Some analysts worry it will again start to rise in coming months and won’t peak until hitting 10.5 per cent next summer.

Still, businesses cut their payrolls by a net of just 11,000 jobs in November, the smallest decrease since the recession started two years ago, according to the November job report.

For December, economists surveyed by Thomson Reuters expect that the unemployment rate will tick up to 10.1 per cent, but they also expect no job losses on net when the Government reports figures January 8.

The Conference Board survey showed that consumers’ assessment of current conditions worsened in December. Those saying conditions are “bad” increased to 46.6 per cent from 44.5 per cent, while those saying business conditions are “good” decreased to 7.0 per cent from 8.1 per cent.

Consumers’ six-month outlook improved in December. Those anticipating business conditions will be better over the next six months increased to 21.3 per cent from 19.7 per cent, while those expecting conditions will deteriorate declined to 11.9 per cent from 14.6 per cent.

The outlook for the job market was also more positive. The percentage of consumers expecting more jobs to become available in the months ahead increased to 16.2 per cent from 15.8 per cent, while those expecting fewer jobs declined to 20.7 per cent from 23.1 per cent. However, the proportion of consumers anticipating an increase in their incomes declined to 10.3 per cent from 10.9 per cent.

NEW YORK, USA — Holiday shoppers walk Fifth Avenue in New York on December 22, searching for a bargain. A monthly survey said yesterday that US consumers’ confidence in the economy rose again in December. (Photo: AP)