US consumer confidence reading beats expectations

The world’s largest economy continues its run of good news after consumer confidence rose in August.

The closely-monitored Consumer Confidence Index from the Conference Board business organisation grew to 54.1 from an upwardly revised 47.4 the previous month.

The latest reading exceeded market expectations but it is still well below the 90 mark - the minimum level associated with a healthy economy. Anything above the 100 mark indicates strong growth.

The Index is closely watched as personal spending accounts for more than two-thirds of US economic activity.

In the meantime, the housing market received some good news after the Standard & Poor’s/Case-Shiller’s US National Home Price Index rose 1.4% in the second quarter compared with the first quarter - the first quarterly increase in three years.

The data has been welcomed by analysts and Sal Guatieri, an economist at BMO Capital Markets, said: “It won’t be a smooth ride, but with consumer confidence now tracking higher, the groundwork for a sustainable recovery appears to be in place.”

The news comes as US President Barack Obama has confirmed that Ben Bernanke has been nominated for a second term as chairman of the US central bank - the Federal Reserve.

Mr Obama took a break from his summer vacation to make the announcement and said “Mr Bernanke had helped prevent a repeat of the Great Depression.”

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