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Business

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At a glance
Other economic reports released Tuesday:
Home sales: Rose in May to the highest level in six years, providing the strongest signal yet that housing is recovering from a recent slowdown. New-home sales in the U.S. jumped 18.6 percent last month after a 3.7 percent increase in April, the Commerce Department reported. The gains followed declines in February and March blamed partly on harsh winter weather.
Home prices: Rose in April from a year ago at the slowest pace in 13 months, reflecting a recent drop-off in sales. The Standard & Poor’s/Case-Shiller 20-city U.S. home price index rose 10.8 percent in April from 12 months earlier. That’s a healthy gain, but down from 12.4 percent in the previous month and the smallest since March 2013. Annual price gains slowed in 19 of the 20 cities. Only Boston saw price increases accelerate.
Associated Press
Sales of new homes such as this one in Tisbury, Mass., jumped 18.6 percent in May.

Confidence index reaches 6-year high

– U.S. consumers are more confident about the economy than they have been in more than six years.

The Conference Board’s confidence index rose to 85.2 this month from a revised 82.2 in May, the private research group said Tuesday. The June figure is the highest since January 2008, a month after the recession officially began.

More Americans are optimistic about business conditions and the outlook for jobs, though fewer expect their incomes will grow over the next six months.

“Still, the momentum going forward remains quite positive,” said Lynn Franco, a Conference Board economist.

The index compiled by the Conference Board shows that confidence has been rising steadily since bottoming at 25.3 in February 2009. It’s well above last year’s average of 72.3. But it still hasn’t returned to full health. Before the recession, the index usually topped 90.

Consumers’ attitudes are closely watched because their spending accounts for about 70 percent of U.S. economic activity.

Consumers registered the most favorable assessment of current business conditions since March 2008, and their outlook for the next months rose to highest level since August 2013. The percentage saying jobs are “plentiful” was 14.7 percent, highest since May 2008.

“Americans appear to have had a bit more of a spring in their step over the past two months,” said Jennifer Lee, senior economist with BMO Capital Markets.

An improving job market has brightened Americans’ outlook.

The U.S. economy generated more than 200,000 jobs in May for the fourth consecutive – the longest such streak since 1999. The unemployment rate has tumbled to 6.3 percent in May from 7.5 percent a year earlier.

Icy weather put the economy in a deep freeze the first three months of the year: From January through March, the economy contracted at a 1 percent annual rate – a figure that might be downgraded even more when the government issues updated first-quarter numbers today.

But economists expect the economy to pick up momentum as the year wears on and to expand at a 3 percent annual pace in the second half of 2014.

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