ActionForex.com
Dec 18 14:24 GMT

Sponsors

Forex Expos

US Consumer Confidence Moderated in July; Existing Home Prices Increased in May Print E-mail
Daily Forex Fundamentals | Written by RBC Financial Group | Jul 30 13 15:49 GMT

US Consumer Confidence Moderated in July; Existing Home Prices Increased in May

  • US consumer confidence declined to 80.3 in July 2013 from 82.1 in the previous month. Market expectations had been for a reading of 81.3.
  • The current employment differential improved to -23.3 from -25.8 in June, which was its best reading since September 2008, as consumers were less pessimistic about labour market conditions.
  • Even with the modest pullback in consumer confidence in July, the sharp increases recorded in the previous three months left the measure above its second-quarter 2013 average at the start of third quarter of 2013. This significant improvement in consumer sentiment in recent months has come as the recoveries in the labour and housing markets become more firmly entrenched, both of which support a rosier view of households' financial position. Increased confidence in the outlook bodes for consumer spending accelerating during the second half of 2013 and into next year, which is consistent with our forecast for the economy as a whole to see a more robust pace of growth compared to the relatively lacklustre rates recorded in the past year.
  • In a separate release, the seasonally adjusted S&P/Case-Shiller 20-City Composite measure of US home prices rose 1.0% in May 2013. The annual pace of increase in the unadjusted index picked up slightly to 12.2%, which was its fastest pace since March 2006, from 12.1% in April.

The Conference Board's measure of US consumer confidence declined by 1.8 points to 80.3 in July 2013 (expectations had been for a reading of 81.3). The monthly decline retraced only a small portion of the cumulative 20.2 point increase recorded during the previous three months that had brought the measure to 82.1 in June (previously reported as 81.4), which was its highest level since January 2008. The modest deterioration in sentiment in July reflected less optimistic appraisals of the short-term outlook, with the "expectations for six months hence" component down 6.4 points to 84.7. In contrast, the "present situation" component rose for the fourth consecutive month and was up 4.9 points to its highest level since May 2008 at 73.6.

With respect to labour market conditions, those saying jobs were "plentiful" rose to 12.2% from 11.3% in June (the highest share since September 2008) while those saying jobs were "hard to get" declined to a four-month low of 35.5% from 37.1% in the previous month. The net result was that the labour market differential (the difference between these two components) improved to -23.3 in July from -25.8 in June. This represents the best assessment since September 2008.

Even with the modest pullback in consumer confidence in July, the sharp increases recorded in the previous three months left the measure above its second-quarter 2013 average at the start of third quarter of 2013. This significant improvement in consumer sentiment in recent months has come as the recoveries in the labour and housing markets become more firmly entrenched, both of which support a rosier view of households' financial position. Increased confidence in the outlook bodes for consumer spending accelerating during the second half of 2013 and into next year, which would be consistent with our forecast for the economy as a whole to see a more robust pace of growth compared to the relatively lacklustre rates recorded during the past year.

In a separate release, the seasonally adjusted S&P/Case-Shiller 20-City Composite US home price index rose 1.0% on a month-over-month basis in May, compared to market expectations for a 1.4% gain. The measure is at its highest level since September 2008. The unadjusted index rose 12.2% on a year-over-year basis in May, accelerating slightly from the 12.1% gain in the previous month and marking the highest rate of increase since March 2006.

 

About the Author

RBC Financial Group

The statements and statistics contained herein have been prepared by the Economics Department of RBC Financial Group based on information from sources considered to be reliable. We make no representation or warranty, express or implied, as to its accuracy or completeness. This report is for the information of investors and business persons and does not constitute an offer to sell or a solicitation to buy securities.

Facebook MySpace Twitter Digg Delicious Google Bookmarks 

Analysis Reports

Central Bank Analysis
Economic Data Reviews
Technical Analysis

Forex Brokers

ActionForex.com © 2014 All rights reserved.