After a dramatic decline of nearly 11 points in February’s Consumer Confidence reading, American’s confidence in the economy jumped just over 6 points in March to 52.2. The Consumer Confidence index is an important indicator as consumer spending accounts for nearly 70 percent of the economic activity in the US. This means that until consumer spending returns to pre-recession levels, economic growth will remain muted.
Despite the return to positive increase in the index, March’s result is still the lowest level since April of 2009.
“Despite the month’s increase, consumers continue to express concern about current business and labor conditions,” Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement. “And their outlook for the next six months is still rather pessimistic.”
Source: Associated Press
Home prices in the 20 US cities surveyed by the S&P/Case-Shiller index, unexpectedly rose in January. Overall, the index rose 0.3 percent over December adding further to the case that the economy is slowly improving. According to the report, an influx of cheaper homes coming to the market, continued low borrowing costs, and government incentives have been instrumental in supporting the housing market.
Still, the US is suffering with a rising foreclosure rate that remains a continued threat to the economy. Little in the way of relief is expected until the employment situation improves and few analysts see a return to employment growth before the end of the year.
“It’s a temporary stabilization,” said Joseph Brusuelas, president of Brusuelas Analytics in Stamford, Connecticut, who had forecast a month-over-month gain in the adjusted index. “Foreclosures are still going to bite the market. Given the preponderance of negative housing data, we may see another leg down.”
Source: Bloomberg
