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Economic Signs Point Up, Down
The economy continued to send mixed signals this week, leaving the nation's financial future shrouded in doubt. Pessimists found plenty of evidence to support a negative view, optimists found some reasons for cheer.
Sales of new single family homes slid backward in September, according to the latest figures from the Census Bureau and HUD. September Sales on an adjusted annual basis were off 3.6% from the previous month, which had been revised downward. Sales in September were 7.8% below September 2008.
There was a spot of good news, too. The median price of new homes sold rose 2.5% to $204,800 (the average was $282,600) in September, suggesting a strengthening trend to home price appreciation after many months of decline.
The S&P/ Case-Shiller Home Price Indices also showed improvement in August. The annual rate of price decline in its 10-city and 20-city composite indices both improved versus the previous month. This was the seventh month of improved readings, beginning in early 2009, said an S&P news release.
Consumer confidence however, recorded a second month of decline in October, according to The Conference Board Consumer Confidence Index, driven down primarily by gloom about the jobs market.
The index fell more than 5 1/2 points in October to 47.7 from September's 53.4. The Present Situation Index decreased to 20.7 points from 23.0 in August. The Expectations Index fell to 65.7 from 73.7.
Lynn Franco, director of The Conference Board Consumer Research Center, said that labor market conditions had played a large role in driving consumer expectations lower.
"The Present Situation Index is now at its lowest reading in 26 years" (Index 17.5, Feb. 1983), Franco added. "The short-term outlook has also grown more negative, as a greater proportion of consumers anticipate business and labor market conditions will worsen in the months ahead. Consumers also remain quite pessimistic about their future earnings, a sentiment that will likely constrain spending during the holidays."
More respondents in October than in September called business conditions "bad," and said jobs were, "hard to get." At the same time, fewer called conditions "good" or characterized jobs as "plentiful."
However, a release from The Conference Board earlier in the week showed the index of leading economic indicators had continued gains in September, for the sixth consecutive month.
Read the Census new home sales news release here.
Read The Conference Board news release here.
Read the S&P/Case-Shiller report here.