INSTANT VIEW: Consumer confidence, new home sales rise

NEW YORK (Reuters) - U.S. consumer confidence recovered far more than expected in August as worries over inflation eased, the Conference Board said on Tuesday.

NEW HOME SALES

Sales of newly constructed U.S. single-family homes in July were lower than economists expected but rose from a June pace that was the slowest in nearly 17 years, a government report showed on Tuesday.

KEY POINTS:

CONSUMER CONFIDENCE: * The Conference Board said its index measuring consumers' mood jumped to 56.9 this month from July's 51.9, reaching the highest level since May.

* That was well above economists' expectations for a reading of 53.0, according to the median of their forecasts in a Reuters poll. The 79 forecasts ranged from 50.0 to 56.2.

* The improvement in sentiment came during a month when oil prices retreated further from July's record highs but consumers' evaluation of their present situation and the job market deteriorated further.

* The Conference Board, an industry group, said its gauge of inflation expectations fell to 6.7 percent from July's revised 7.5 percent. It hit a record high of 7.7 percent in May and June and was originally reported at 7.6 percent for July.

* The overall consumer confidence index dates back to 1967. Its lowest reading ever was 43.2, which it hit in December 1974.

NEW HOME SALES: * Economists polled by Reuters were expecting to sales to remain unchanged at the 530,000 annual pace first reported for June. The actual sales pace in July of 515,000 climbed from the revised June level of 503,000, which was the lowest since a 487,000 pace in September 1991.

* The inventory of homes available for sale shrank 5.2 percent to 416,000, the lowest since October 2004. The July sales pace put the supply of homes available for sale at 10.1 months' worth. * The median sales price rose slightly to $230,700 from $230,100 from June, but was down 6.3 percent from a year earlier, the government said.

COMMENTS:

ARTHUR HOGAN, CHIEF MARKET ANALYST, JEFFERIES & CO, BOSTON:

Consumer confidence: "It's as good as it looks for a reason, and the reason is very closely tied to gasoline prices coming down, and that's OK. As they went up, you saw consumer confidence go down, so the reverse should hold true."