Dec. 30 (Bloomberg) -- U.S. consumer confidence may have held close to a 14-month high and a gauge of Chicago-area manufacturing may have eased this month from the highest since February 1995, economists said in advance of two private surveys to be released today. The Conference Board's index of consumer sentiment for December may have risen to 91.8, the median forecast of 48 economists surveyed by Bloomberg News, from 91.7 last month. An index of factory activity in the Chicago region may have declined to 62 this month from a nine-year high of 64.1 in November, based on the median of 44 estimates.
Consumer confidence, a pillar of the U.S. economic recovery from a 2001 recession, rose in November to the highest since September 2002, buoyed by new jobs and personal income gains. Manufacturing, which had been a drag on the recovery until this year, shows signs of improving as a weaker dollar helps exports. ``The U.S. is probably going to have fairly strong growth, perhaps not as strong next year as this year,'' Robert Hormats, vice chairman of Goldman Sachs International, said in a televised interview with Bloomberg. ``I do think we're in for a very good year in terms of growth at home and growth internationally.'' A separate report may show that previously owned homes sold at a 6.32 million annual rate in November, down from 6.35 million a month earlier, based on the median of 44 estimates by economists. All three reports are scheduled for 10 a.m. today in Washington.
Consumer Sentiment
Consumer attitudes about the economy have grown more upbeat after four months of job growth and a 26 percent increase in the Standard & Poor's 500 Index so far this year. For manufacturers, exports have rebounded as the dollar's value against currencies of six major U.S. trading partners is on pace for the biggest drop since 1987, making U.S. goods less expensive overseas. The economy has added 328,000 jobs since August, the most in a four-month stretch since early 2001, and the Dec. 14 announcement of former Iraqi President Saddam Hussein's capture occurred in the midst of the Conference Board survey period. Economists said confidence may be restrained because the job gains haven't been stronger, with last month's increase of 57,000 positions coming in at less than half the median forecast. The Conference Board, a New York research group, bases its sentiment index on a 5,000-household survey. Projected readings in the Bloomberg survey of economists ranged from 85 to 97.
Chicago Index
The index of the National Association of Purchasing Management-Chicago has been higher than 50, meaning business expanded at the region's manufacturers, for seven straight months, the longest since February through August 2002. Estimates of the gauge's reading ranged from 58 to 67. Investors and economists watch the Chicago area for clues about the direction of U.S. manufacturing because the region has more factory workers than any metropolitan area other than Los Angeles. Before the recession, Chicago had the most factory jobs. Sales of previously owned homes in November probably exceeded an annual pace of 6 million for a fifth month, spurred by mortgage rates close to the lowest on record, economists said. The National Association of Realtors reported a record pace of 6.68 million in September.
The 30-year fixed mortgage rate fell to an average 5.93 percent in November, compared with 5.95 percent a month earlier and a record low of 5.21 percent in June, according to figures from Freddie Mac, the No. 2 buyer of U.S. mortgages. The real estate group projects the rate will average 6.4 percent in 2004 as the economy continues to expand. Gross domestic product will probably grow 4.4 percent next year, the most since 1999, according to the median estimate of 62 economists surveyed earlier this month by Bloomberg News. Mortgage rates generally move in step with long-term securities such as 10-year Treasury notes. //www.bloomberg.com