Consumers More Glum as Housing Double-Dips

Written By Brian Hicks

Posted May 31, 2011


Here’s the latest word from Cheery-Ville, where it’s getting harder and harder to slap a happy face on the U.S. economy.

Heck, even the people are buying it anymore…if they ever really did.

According to The Conference Board this morning, the Consumer Confidence Index fell to 60.8 in the lowest reading of the last six months. That was well below expectations of a move in the opposite direction as the consensus among economist was for an increase to 67.

“Consumers are considerably more apprehensive about future business and labor market conditions as well as their income prospects,” said Lynn Franco, director of The Conference Board Consumer Research Center. She also said fears over inflation, which eased in April, picked up again in May.

That puts the bellwether index still far below a reading of 90 that indicates a healthy economy. In fact, it hasn’t even approached that level since the recession began in December 2007.

Meanwhile, the news in housing today only confirmed what we have known all along: The housing double-dip is well underway….

From Bloomberg by Bob Willis entitled: Home Prices is 20 U.S. cities Fall to 8-year Low

“Home prices in 20 U.S. cities dropped in March to the lowest level since 2003, showing housing remains mired in a slump almost two years into the economic recovery.

The S&P/Case-Shiller index of property values in 20 cities fell 3.6 percent from March 2010, the biggest year-over-year decline since November 2009, the group said today in New York. At 138.16, the gauge was the weakest since March 2003.

A backlog of foreclosures poised to reach the market means prices may stay depressed, dissuading builders from taking on new-home construction projects. Unemployment at 9 percent and stricter lending conditions are signs that any recovery in housing may take years.

“With the foreclosure pipeline still full to bursting, it’s hard to see this downward pressure on prices abating,” said Paul Dales, a senior U.S. economist at Capital Economics Ltd. in Toronto. “I wouldn’t be surprised to see prices continue to fall this year and maybe into next year.”

Nationally, home prices decreased 5.1 percent in the first quarter from the same time in 2010, and were down 4.2 percent from the previous three months, the biggest one-quarter decrease since the first three months of 2009. At 125.41, the index was the lowest since the second quarter of 2002.”

By the way, the one thing that is up is the participation rate in food stamp program. All told, 44.199 million people are now standing in the modern day equivalent of the soup line.

 That’s marks an all-time high.

food stamps


The fantasy recovery goes on…

Related Articles:

The New Housing Paradigm 

60 Minutes: The Next Housing Shock

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Case-Shiller Index: The Housing Recession is Not Over

Matt Taibbi On ForeclosureGate Crimes

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