Washington, Jan. 13 (Bloomberg) -- U.S. consumers are growing more confident and increasing spending on automobiles, spurring improvement at factories, economic reports will probably show this week. Revitalized auto sales likely helped boost retail sales 1.5 percent in December, based on the median forecast of economists polled by Bloomberg News. The University of Michigan's preliminary consumer confidence index for January is likely to rise to 87 from 86.7 last month. Industrial production probably had its biggest gain since July, economists said. ``Retail sales showed a strong gain for December,'' said Mickey Levy, chief economist with Bank of America Corp. in New York. ``Survey results and anecdotal evidence point toward a solid pace of sales just before and after the Christmas holiday, contradicting initial reports, which were extremely negative.''
While some merchandise retailers including Wal-Mart Stores Inc. and Target Corp. have reported weaker-than-expected holiday sales, automakers garnered higher sales by adding discounts. Economists predict Tuesday's retail sales for December to show that sales excluding autos increased a more modest 0.3 percent. A 1.5 percent rise in December retail sales including autos would be more than three times the 0.4 percent gain in November. The gain would be the biggest since October 2001, when automakers first introduced no-interest car loans to boost sales in the aftermath of the Sept. 11 terrorist attacks. General Motors Corp.'s U.S. vehicle sales rose 36 percent last month, the company's best December in 23 years, while Ford Motor Co.'s sales climbed 13 percent. Ford said it would raise its first-quarter production plans by 10,000 vehicles to 1.01 million. That still marks a decrease from 2002's first quarter, when the company produced 1.05 million cars and trucks.
Consumer Confidence
The University of Michigan is expected to say Friday that its consumer confidence index has gained 8 percent since October, when it reached a nine-year low of 80.6. Industrial production at mines, factories and utilities probably rose 0.2 percent in December, economists said. The Federal Reserve report, which is due to be released Friday, showed no growth from August through October. Capacity utilization may rise to 75.7 percent from 75.6 percent. The Federal Reserve Bank of Philadelphia's January index of manufacturing activity in the Mid-Atlantic region is forecast to rise to 9 from 7.2 last month, in a report set for Thursday. That would be the index's third consecutive gain. Still, increases in production aren't yet strong enough to push prices higher. Two measures of inflation due next week are expected to show that inflation remains tame.
Producer Prices
Prices paid to factories, farmers and other producers probably rose 0.3 percent in December after decreasing 0.4 percent in November. Economists expect some gains in energy-sensitive products because the price of crude oil rose about 15 percent in December. The consumer price index probably rose 0.2 percent in December after a 0.1 percent gain in November. The PPI report will be released Wednesday, followed by the CPI on Thursday. //www.quote.bloomberg.com