Consumer confidence sinks
The conference board released their consumer confidence reading for December. Analysts were expecting a reading of 56.3 on the confidence index. Instead it registered at 52.5…..a pretty hefty miss.
”The Conference Board Consumer Confidence Index®, which had improved in November, decreased slightly in December. The Index now stands at 52.5 (1985=100), down from 54.3 in November. The Present Situation Index declined to 23.5 from 25.4. The Expectations Index decreased to 71.9 from 73.6 last month.”
US home prices double dip
The latest Case/Shiller house price index from October was released today (there is a several month lag). It confirms what has been obvious to just about anyone: A bottom is still not in for US housing.
Housing prices slid 1.3 per cent in October from September, surprising economists who had forecast a smaller decline. Year-over-year prices also weakened.
House prices in 6 of the 20 cities making up the composite index fell to new lows since the housing crisis began.
From the report:
“The double-dip is almost here, as six cities set new lows for the period since the 2006 peaks. There is no good news in October’s report. Home prices across the country continue to fall.” says David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s.
“The trends we have seen over the past few months have not changed. The tax incentives are over and the national economy remained lackluster in October, the month covered by these data. Existing homes sales and housing starts have been reported for both October and November, and neither is giving any sense of optimism. On a year-over-year basis, sales are down more than 25% and the months’ supply of unsold homes is about 50% above where it was during the same months of last year.”
And that’s not even considering the 2 million homes set to hit the market in what has been dubbed the ‘shadow inventory’. It all adds up to more pain in the US housing market. Consumer confidence and consumer spending will remain tied to this. As too will the bulk of our exports.
This is what a housing train wreck looks like. While ours may not see the same level of carnage, our engine is set to jump the tracks nonetheless.