Text
NEW YORK - A steady job market helped consumers overcome their concerns over high energy costs in July, unexpectedly lifting a barometer of consumer sentiment on Tuesday.
A report that showed another monthly decline in home sales, which have been a source of confidence for consumers, also stoked concerns about the economy. The decline, however, was less than expected by analysts.
The National Association of Realtors reported Tuesday that sales of previously owned homes and condominiums dropped 1.3 percent in June to a seasonally adjusted annual rate of 6.62 million units; analysts had expected sales to fall to 6.60 million units. It was the eighth time in the past 10 months that sales slipped, while home prices edged up at the slowest pace in more than a decade.
The New York-based Conference Board said Tuesday that its confidence index rose to a better-than-expected reading of 106.5 from a revised 105.4 in June. Analysts had expected the index to fall slightly to 104.
Stocks vacillated Tuesday as mixed earnings news overshadowed an unexpected jump in consumer confidence and the mild housing data. In early afternoon trading, the Dow dropped 13.44, or 0.12 percent, to 11,037.61, after briefly climbing into positive territory. Investors had a brief bout of optimism that the economy was slowing gradually, rather than slamming on the brakes.
"The employment situation is helping confidence hold at a decent level," Gary Thayer, chief economist at A.G. Edwards & Sons Inc. "Right now, consumers are happy that they have a job, and that at least most of the economy outside of housing is doing well."
Consumer confidence has been volatile this year, with the index posting declines both in February and May amid pessimism about the job market. This year's overall performance is in line with the rebound seen since last November in the aftermath of last year's Gulf of Mexico hurricanes, however.
Lynn Franco, director of The Conference Board Consumer Research Center, said the confidence index is showing some worrisome signs, however.
"Present-day conditions remain favorable, though not as strong as earlier this year. Expectations for the months ahead remain cautious and also below levels earlier this year," said Franco, in a statement.
The Present Situation Index, which measures how shoppers feel now about economic conditions, rose to 133.0 from 132.2. The Expectations Index, which measures consumers' outlook over the next six months, edged up to 88.8 from 87.5 last month.
While Federal Reserve chairman Ben Bernanke suggested last week that the series of interest rate hikes ? aimed to combat inflation ? may be nearing an end, high energy costs could drive up prices elsewhere and the Fed faces a tricky challenge of keeping inflation in check without derailing the economy.
Oil prices remain stubbornly high at near $74 a barrel, in part because of worries that the conflict between Israel and Hezbollah in Lebanon could draw in other countries in the Middle East and cause supply disruptions.
Although the job market remains healthy, energy costs have already helped to slow down the nation's payroll growth in recent months. Some employers are taking a wait-and-see stance as they figure out where the economy is heading.
Economists will be closely watching the latest monthly employment snapshot from the Labor Department, due to be released Aug. 4.
"The job market affects more people than the housing market," Thayer said.
Energy costs have had a cumulative effect over the course of the year on shoppers, said Janet Hoffman, managing partner of the North American retail division of Accenture, a consulting firm. "Consumers are just starting to feel their shrinking disposable income."
Stores have feared a slowdown in consumer spending in the second half, but the question is how deep.
The consumer confidence index ? derived from responses received through July 18 to a survey mailed to 5,000 households in a consumer research panel ? showed that consumers remain uneasy. The figures released Tuesday include responses from at least 2,500 households.
Consumers claiming conditions are "good" increased to 27.6 percent from 26.6 percent. Labor market conditions were little changed. Consumers saying jobs are "plentiful" increased to 28.6 percent from 28 percent,while those claiming jobs are "hard to get" remained virtually unchanged at 19.9 percent.
Good to know that Americans are still optimistic and pursuing a path that will promote our economic growth. Our low unemployment is staying that way as well.
Ben Bernanke is doing an excellent job and I thank the President for appointing him. :thumbsup:
NEW YORK - A steady job market helped consumers overcome their concerns over high energy costs in July, unexpectedly lifting a barometer of consumer sentiment on Tuesday.
A report that showed another monthly decline in home sales, which have been a source of confidence for consumers, also stoked concerns about the economy. The decline, however, was less than expected by analysts.
The National Association of Realtors reported Tuesday that sales of previously owned homes and condominiums dropped 1.3 percent in June to a seasonally adjusted annual rate of 6.62 million units; analysts had expected sales to fall to 6.60 million units. It was the eighth time in the past 10 months that sales slipped, while home prices edged up at the slowest pace in more than a decade.
The New York-based Conference Board said Tuesday that its confidence index rose to a better-than-expected reading of 106.5 from a revised 105.4 in June. Analysts had expected the index to fall slightly to 104.
Stocks vacillated Tuesday as mixed earnings news overshadowed an unexpected jump in consumer confidence and the mild housing data. In early afternoon trading, the Dow dropped 13.44, or 0.12 percent, to 11,037.61, after briefly climbing into positive territory. Investors had a brief bout of optimism that the economy was slowing gradually, rather than slamming on the brakes.
"The employment situation is helping confidence hold at a decent level," Gary Thayer, chief economist at A.G. Edwards & Sons Inc. "Right now, consumers are happy that they have a job, and that at least most of the economy outside of housing is doing well."
Consumer confidence has been volatile this year, with the index posting declines both in February and May amid pessimism about the job market. This year's overall performance is in line with the rebound seen since last November in the aftermath of last year's Gulf of Mexico hurricanes, however.
Lynn Franco, director of The Conference Board Consumer Research Center, said the confidence index is showing some worrisome signs, however.
"Present-day conditions remain favorable, though not as strong as earlier this year. Expectations for the months ahead remain cautious and also below levels earlier this year," said Franco, in a statement.
The Present Situation Index, which measures how shoppers feel now about economic conditions, rose to 133.0 from 132.2. The Expectations Index, which measures consumers' outlook over the next six months, edged up to 88.8 from 87.5 last month.
While Federal Reserve chairman Ben Bernanke suggested last week that the series of interest rate hikes ? aimed to combat inflation ? may be nearing an end, high energy costs could drive up prices elsewhere and the Fed faces a tricky challenge of keeping inflation in check without derailing the economy.
Oil prices remain stubbornly high at near $74 a barrel, in part because of worries that the conflict between Israel and Hezbollah in Lebanon could draw in other countries in the Middle East and cause supply disruptions.
Although the job market remains healthy, energy costs have already helped to slow down the nation's payroll growth in recent months. Some employers are taking a wait-and-see stance as they figure out where the economy is heading.
Economists will be closely watching the latest monthly employment snapshot from the Labor Department, due to be released Aug. 4.
"The job market affects more people than the housing market," Thayer said.
Energy costs have had a cumulative effect over the course of the year on shoppers, said Janet Hoffman, managing partner of the North American retail division of Accenture, a consulting firm. "Consumers are just starting to feel their shrinking disposable income."
Stores have feared a slowdown in consumer spending in the second half, but the question is how deep.
The consumer confidence index ? derived from responses received through July 18 to a survey mailed to 5,000 households in a consumer research panel ? showed that consumers remain uneasy. The figures released Tuesday include responses from at least 2,500 households.
Consumers claiming conditions are "good" increased to 27.6 percent from 26.6 percent. Labor market conditions were little changed. Consumers saying jobs are "plentiful" increased to 28.6 percent from 28 percent,while those claiming jobs are "hard to get" remained virtually unchanged at 19.9 percent.
Good to know that Americans are still optimistic and pursuing a path that will promote our economic growth. Our low unemployment is staying that way as well.
Ben Bernanke is doing an excellent job and I thank the President for appointing him. :thumbsup:
Facebook
Twitter