Consumer Outlook, Home Sales Drop

Lower consumer confidence and falling home sales added to the picture of U.S. economic weakness Wednesday, raising expectations that the Federal Reserve may lower interest rates again in early 1996.

The Conference Board, a prominent business research group, said its widely followed monthly index of consumer confidence fell to 98.7 in December from 101.6 in November.

The Conference Board survey showed fewer Americans believe the economic environment is good, fewer believe jobs are plentiful and fewer have plans to make major purchases like cars or big household appliances.

Sales of previously owned homes dropped 1.7 percent last month, the second straight decline, according to the National Association of Realtors.

Sales totaled 4.04 million at a seasonally adjusted annual rate, down from 4.11 million in October and 4.15 million in September.

The association said consumers stayed out of the housing market partly because of the government shutdown.