Feb. 22 (Bloomberg) -- U.S. consumer confidence probably declined in February, hovering below a six-month high, economists said before today's private report.

The Conference Board's index is forecast to fall to 103 from 103.4, according to the median forecast of 50 economists in a Bloomberg News survey. January's reading was the highest since 105.7 in July. The New York-based research group's report is scheduled for 10 a.m. Washington time.

``Consumers' spirits seem to be sagging a little bit as we begin the year,'' said Chris Rupkey, an economist at Bank of Tokyo-Mitsubishi.

The successful completion of elections in Iraq and an improving jobs picture may have prevented optimism from falling further, economists said. Retail sales excluding automobiles rose twice as fast in January as they did in December, suggesting consumer spending may be robust this quarter.

The Conference Board's report is based on a survey of 5,000 households and covers general economic conditions, people's employment prospects and spending plans.

``The economy seems to have entered 2005 expanding at a reasonably good pace, with inflation and inflation expectations well anchored,'' Federal Reserve Chairman Alan Greenspan told lawmakers last week. ``The evidence broadly supports the view that economic fundamentals have steadied.''

Growth

Gross domestic product rose 4.4 percent last year, the fastest since 1999. The economy may expand 3.6 percent this year, according to the median forecast of economists surveyed by Bloomberg from Jan. 31 to Feb. 7.

The number of Americans filing first-time claims for unemployment insurance fell to 302,000 in the week ended Feb 12, the lowest in more than four years, the Labor Department said Feb. 17. Consumers may be getting a sense of an improved labor market from their own experience or of those people close to them, economists including RBS Greenwich Capital's Stephen Stanley said.

The U.S. added 146,000 jobs in January. The Labor Department is to report this month's figure on March 4.

``In general, the consumer confidence numbers should more than anything else track the job situation and to the extent that that's been slowly improving we should see confidence figures improving,'' Stanley said.

Employment

Consumer sentiment as measured by the University of Michigan fell to 94.2 this month, the lowest since November, from 95.5 in January.

The Conference Board's index tends to put more emphasis on the labor situation than the University of Michigan's survey, economists say. In addition to asking about economic prospects, the private group's survey polls consumers on their views of job prospects and projected spending.

The confidence figures may also reflect changes in the stock market, which may affect consumers' sense of personal wealth. The Standard & Poor's 500 Index has averaged 1200.1 this month, compared with 1181.4 in January.

Greenspan last week said low interest rates and rising home prices have helped keep consumer spending strong. As interest rates rise and equity extraction from homes through sales and mortgage refinancing slows, consumer spending may slip, he added.

Retail sales excluding automobiles rose 0.6 percent in January, after a 0.3 percent gain the month before. Retailers including Target Corp., Nordstrom Inc. and American Eagle Outfitters Inc. reported stronger-than-expected demand in January, aided by discounts and holiday gift cards that were cashed in. The cards aren't counted as a sale until redeemed.

                  Bloomberg Survey

          FIRM                      Cons.
                                    Conf.
          --------------------------------
          Number of replies           50
          MEDIAN                    103.0
          AVERAGE                   103.0
          High Forecast             106.0
          Low Forecast               98.0
          Previous                  103.4
          --------------------------------
          ABN Amro                  102.5
          4CAST Ltd.                101.0
          Action Economics          102.0
          AIB Global Treasury       103.0
          Alleti Gestielle          101.0
          Argus Research Corp.       98.5
          BNP Paribas               103.0
          B of A Securities         104.0
          Barclays Capital          102.0
          Bear Stearns              102.0
          Bank of Tokyo- Mitsub.    104.2
          Briefing.com               98.0
          CantorViewpoint           102.5
          CIBC World Markets        102.0
          Citigroup                 102.0
          Commerzbank               104.0
          Credit Agricole           102.7
          Credit Suisse FB          104.0
          DekaBank                  104.0
          Desjardins Group          102.5
          Deutsche Bank Research     99.5
          Dresdner Kleinwort        102.0
          FTN Financial             104.0
          Fortis Bank NV            105.0
          HBOS Treasury             103.5
          HSBC Markets              104.0
          HypoVereinsbank           105.0
          I.D.E.A.                  103.0
          ING Financial Markets     103.5
          Informa Global Markets    104.0
          IntesaBci                 103.0
          JPMorgan Fleming          103.0
          Lehman Brothers           105.0
          Merrill Lynch             102.5
          Mizuho Securities         104.0
          Morgan Stanley            103.0
          National Bank Financial   103.1
          National City Bank        105.1
          Nord/LB                   103.5
          RBS Greenwich Capital     104.0
          Ried, Thunberg & Co.      103.0
          Scotiabank Group          102.5
          Societe Generale          104.5
          Stone & McCarthy          103.5
          Thomson/IFR               102.7
          Ulpia                     102.8
          Wachovia                  106.0
          Wells Fargo               102.0
          Westpac Banking           106.0
          Wrightson                 101.0

To contact the reporter on this story: Courtney Schlisserman in Washington at cschlisserma@bloomberg.net.

Last Updated: February 22, 2005 00:27 EST