Stocks rallied yesterday, spurred on in part by seemingly less dour consumers.
Consumer confidence extended its May rebound, rising to the highest level since last September as more shoppers are feeling the worst of the recession is now behind them.
The Conference Board said today that its Consumer Confidence Index, which had dramatically increased in April, zoomed past economists’ expectations to 54.9 from a revised 40.8 in April. Economists surveyed by Thomson Reuters were expecting 42.3.
In February, confidence levels had hit a new historic low of 25.3 as banks teetered on the brink of nationalization.
The latest readings marked the highest level in eight months. Even still, the latest levels are still below 100, which ordinarily indicates a healthy economy.
Meanwhile, there is less joy in Consumerville where home prices are concerned. The declines went even deeper in March.
From the Wall Street Journal by Kerry E. Grace and Kevin Kingsbury entitled: Home Price Continue Downward March
“U.S. home prices continued their multiyear tumble in March, according to the S&P Case-Shiller home-price indexes, as the downdraft shows no near-term signs of abating.
For the first quarter, the S&P/Case-Shiller U.S. National Home Price Index posted a 19.1% drop from a year earlier, the biggest quarterly decline for the reading’s 21-year history. S&P Case-Shiller releases 10-city and 20-city indexes every month, but also releases a broader national index every quarter.
Separately, the monthly numbers showed 15 of 20 major metropolitan areas posted price declines of more than 10% from a year earlier, with the Sun Belt continuing to be hit hardest. Nationally, home prices are at levels similar to the fourth quarter of 2002.
The indexes showed prices in 10 major metropolitan areas fell 18.6% in March from a year earlier and 2.1% from February. In 20 major metropolitan areas, home prices dropped 18.7% from the prior year and 2.2% from February.
For the 12th straight month, no region was able to avoid a year-over-year decline. Phoenix and Las Vegas were again the worst performers, with drops of 36% and 31%, respectively. Phoenix is down 53% from its peak in June 2006. Dallas has been the least hurt, down 11% from its June 2007 peak.”
Again, the bottom in housing is nowhere in sight.
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