In another sign of economic weakness, consumer confidence dropped unexpectedly in December. The Conference Board's consumer confidence index, which had improved in November, fell slightly in December to 52.5 from 54.3.
The present-situation index — which measures how people feel about their current economic circumstances — declined to 23.5 from 25.4. The expectations index — which measures how people feel about their future prospects — fell to 71.9 from 73.6 last month.
"Consumers are still in a fragile state and confidence remains at depressed levels despite strong holiday retail sales, low prices and a relatively robust stock market," said Chris Christopher, an economist with research firm IHS Global Insight. "The poor housing market performance, high gasoline prices and a lackluster job market are keeping consumers in a tepid mood."
The index is based on the Conference Board's survey of 5,000 U.S. households. The group started the survey in 1967. The index is benchmarked to consumer sentiment in 1985, because that year was neither a peak nor a trough. Any reading above 100 indicates strong growth.