NEW YORK (Reuters)-consumer perked up a bit in April if they lowered their estimates for inflation and worry less about the labour market, but yet another fall in house prices underlines the challenges for the recovery.
The overall trust level, as measured by the Conference Board, an industry group, still historically low.
A separate report on Tuesday showed that the housing market continues to struggle as home prices fell for a eighth month in February, inching closer to a trough in April 2009.
The Conference Board, an industry group, said the index of consumer behavior rose to a better-than-expected 65.4 in April from a revised 63.8 in March. For full details, see
Higher energy and raw material prices, prices of the political turmoil in the Middle East and North Africa have weighed on consumers lately and there is debate on whether the price increases will be temporary. Data on Monday showed national gasoline prices at $ 3.88 per gallon.
"This still tells me that the consumer is stymied by house values continue to fall, high gas prices and, most importantly, the unemployment rate," said Jeff Cleveland, senior economist at LA-based money manager Payden & Rygel.
With a "very important things that are still weighing on consumers, who with a months worth of data has not changed."
With consumers accounting for around two-thirds of the economy, investors are concerned about continuing high prices will stifle spending and economic growth.
The meter of consumer representation of their present situation climbed to the highest since November 2008, rising to 37.5 39.6 of the month for, while the expectations index soaring.
Despite the decline in the share of those who said jobs are hard to get, to 41.8% of 44.4 percent the month before, the longer-term view was more mixed.
Consumer expectations for inflation in the next 12 months eased, probably a comfort for the Federal Reserve, who wants to keep interest rates low until the economic recovery is on solid footing.
The central bank is holding a two-day meeting begins Tuesday that is expected to conclude with a signal that it is in no hurry to scale back its massive aid for reconstruction.
The u.s. economy is facing new headwind of rising oil prices, Treasury Secretary Timothy Geithner said on Tuesday, but he said a forecast of 3 to 4 percent growth seemed reasonable.
The consumer data gave u.s. stocks a lift, while solid gains of bellwether companies including United Parcel Service the market rally pushed to around three years highs.
UPS raised its Outlook for 2011, although Chief Financial Officer Kurt Kuehn said in an interview the forecast was more to do with confidence in the implementation of the company than economic expectations.
"The economy is resilient, but we don't see things becoming much stronger--just continues to grow moderately," said Kuehn.
HOUSING PRICES SCRAPING 2009 LOWS
Individual data on Tuesday showed that the housing market continues to struggle as U.S. single-family home prices fell for an eighth consecutive month in February, inching closer to a trough in April 2009.
The composite S & P/Case-Shiller index of 20 metropolitan areas fell 0.2 percent in February from January on a seasonally adjusted basis, slightly better than economists ' median forecast for a decline of 0.3 percent.
The composite index of 20-city was at 139.27, just a hair above his 2009 low of $ 139.26. Average home prices in the United States are back to levels where they were in the summer of 2003, S & P said.
In the 20 cities declined 3.3 percent year over year, in line with expectations.
The glut of homes for sale has kept prices low and the market has struggled to gain traction as a home buyer tax credit that has helped buoy the market last spring.
Other data in the past week has some stabilization in the market with the sale of new and existing homes rises in March proposed.
"House prices still fall due to the troubled sale. But the pace of the price decline is slowing down so things seem to be to stabilize, "said Rudy Narvas, senior economist at Societe Generale in New York.
Separately, tumbled the Federal Reserve Bank of Richmond's manufacturing index for 10 in April 20 the month before.
No comments:
Post a Comment