Tag Archives: Consumer Confidence

The Surveys of Consumers' Index of Consumer Sentiment dropped to 81.2 in January from December's 82.5. Compared to a year ago, January's survey was up an even 10 percent from 73.8.

According to Fannie Mae's November National Housing Survey, positive momentum in the housing market has slowed as Americans remain cautious about their personal finances and the overall state of the economy. Nearly two-thirds of those surveyed believe the economy is on the wrong track. Within the next year, 22 percent expect their personal finances to worsen and only 45 percent expect home prices to increase.

One of the earliest phenomenon of the housing bubble was the ascension of home prices, making housing unaffordable relative to incomes. Markets across the nation cascaded from affordable to unaffordable--a key signal that prompted us to warn of the coming housing downturn. And it now appears that this symptom has cropped up once again, as almost all of California's coastal cities are now unaffordable.

Inventories of homes for sale have been slow to bounce back since the 2007-09 recession, despite steady price appreciation since January 2012. Normally, higher prices reflect robust sales. But lately, prices have been rising even though sales remain stuck at relatively low levels, largely due to a lack of inventory. So why are there so few homes for sale? Two Fed economists examine the many factors affecting today's inventory levels.

In a report released this week, Clear Capital linked high levels of distressed sales activity with high levels of home price appreciation, something that may seem out of the ordinary. However, in a conversation with DS News Wednesday, the company's VP of research and analytics explained that this trend is in keeping with the ""first-in-first-out"" recovery the nation has been experiencing over the past 18 months.

Consumer sentiment rebounded in November, though Americans haven't yet forgotten the government shutdown that brought confidence down in October. The Index of Consumer Sentiment, a joint measure tracked by the University of Michigan and Thomson Reuters, rose to 75.1 for the final November tally, making up some of the ground lost in October, when it dropped to 73.2. Last year, the index was measured at 82.7.

After taking a sharp dive in October, consumer confidence continued to decline at a more moderate pace in November, indicating the level of uncertainty that still grips the country. The Conference Board's Consumer Confidence Index dropped two points to 70.4 in the most recent reading. The decline follows a more substantial nine point decrease in October stemming from the partial federal government shutdown.

The University of Michigan's preliminary Index of Consumer Sentiment report shows a drop in confidence for November--and Capital Economics' Amna Asaf is at a loss to explain why. The index fell from 73.2 to a two-year low of 72.0 in the first November report. With the economy in a relatively healthier position compared to last month, Asaf--an economist for the macroeconomics research firm--says the decline is something of a surprise.

Are Americans so accustomed to the ineffectiveness and triviality of Congress that the threat of a third week with essentially no governing body barely registers a blip on consumers' confidence scale? The University of Michigan's Index of Consumer Sentiment was better than many analysts were expecting given the situation in Washington, dropping from 77.5 at the end of September to 75.2 at mid-October.

The federal government shutdown is center stage in the news and the question that is repeatedly asked is: What impact will it have on the economy? Of course, the potential economic impact will be difficult to gauge because the shutdown has stopped the flow of government data releases until the funding battle is resolved. Luckily, one key indicator remains live.