US consumer confidence hits low
New York, May 30, 2012
US home prices edged higher for the second month in a row in March as the housing recovery picked up traction, but consumer confidence cooled in May to a new low, said a report.
The US consumer confidence has plunged to its four-month low as people turned gloomy about the job market and the economic outlook, separate data showed yesterday.
On the home prices growth, experts said the gains in some of the hardest hit areas suggested the improvement was becoming more broad-based.
The S&P/Case Shiller composite home price index of 20 metropolitan areas gained 0.1 per cent in March on a seasonally adjusted basis, though it fell shy of economists' forecasts for a gain of 0.2 per cent.
The housing market has been a thorn in the side of the broader economic recovery but has been gathering momentum with new construction and sales rising in April.
"There is no question that housing has bottomed, in terms of sales, construction and prices, but the recovery is still going to be very modest or sluggish," said Mark Vitner, senior economist at Wells Fargo Securities, in Charlotte, North Carolina.
Prices in the 20 cities fell 2.6 per cent from a year ago, an improvement from the 3.5 per cent yearly decline last month. Seven of the 20 cities saw price increases from a year ago, including hard-hit Detroit and Phoenix.
"While a broad regional variation remains, the fact that some of the areas hardest hit during the housing downturn, such as Florida, Arizona and California, have seen gains in recent months is a positive sign that the gradual improvement in housing conditions is becoming broader based," Peter Newland, an economist at Barclays, wrote in a note.
The report said for the first quarter, while the pace of declines slowed, the indices were still plumbing new post-financial-crisis lows. Prices were down 2 per cent in the first three months of the year following a 3.9 per cent decline in the last three months of 2011.
A report from industry group the Conference Board showed consumer confidence fell to its lowest level since the start of the year, making for the third month of declines.
The index of consumer attitudes fell to 64.9 from a downwardly revised 68.7 the month before, confounding expectations for a gain to 70.-Reuters