US CONSUMER confidence edged up in August, while prices for US homes gained more than expected in June, providing a little relief for those concerned about a slowdown in the economic recovery.
Another report yesterday, however, showed business activity in the US midwest registered a slowdown in August, and was just shy of the pace economists expected.
The Conference Board, an industry group, said its index of US consumer attitudes rose to 53.5 in August from an upwardly revised 51.0 in July.
The median of forecasts from analysts polled by Reuters was for a reading of 50.5. Forecasts ranged from 47.5 to 55.0.
The rise came as a relief to investors following a slew of weaker-than-expected economic reports in recent weeks.
High unemployment and weak consumer spending are seen among the biggest hurdles for recovery.
“This small improvement is encouraging. It suggests that even though consumers remain in a glass-half-empty mood, sentiment isn’t getting any worse,” said Zach Pandl, economist at Nomura Securities International in New York.
US stocks turned positive following the confidence data, while US Treasury debt prices pared some gains and the US dollar trimmed losses against the yen.
The government’s key monthly jobs report is expected on Friday, with a Reuters poll showing economists expect non-farm payrolls declined by 100,000 in August, and the unemployment rate rose slightly to 9.6 per cent.
Also among the day’s more upbeat economic news, the SP/Case Shiller composite index of 20 metropolitan areas rose 0.3 per cent in June from May on a seasonally-adjusted basis.
The rise was better than the 0.2 per cent increase expected by economists polled by Reuters, though slower than the 0.5 per cent rise in May.
However, the gain reflected the lingering boost from homebuyer tax credits that ended in April, and economists agree the effects of buyer tax credits have largely filtered through.
They say home prices will be hard pressed to sustain these gains with unemployment still near 10 per cent. – (Reuters)
