Consumer confidence nudged up by housing market
by David Masters
Consumer confidence was nudged up marginally in July by expectations of recovery in the housing market and an end to the recession, Nationwide said this week.
Nationwide’s Consumer Confidence Index rose to 60 in July, up from a revised 59 in June.
Spending confidence fell for the first time in a year, but British homeowners believe the value of their property will rise in the next six months.
Martin Gahbauer, Nationwide’s chief economist, said consumers remain cautious, but have not been panicked by the recession.
“Consumers might have been reassured by reports that the housing market may be starting to recover, and manufacturing output is no longer falling as rapidly as it was a few months ago,” Gahbauer said.
Around one in five (21%) of those polled expect the economy to worsen in the next six months, compared to 53% at the start of 2009.
In a separate report, the British Retail Consortium revealed a slowdown in shop-price inflation, helping consumer purchasing power.
Inflation for food prices slowed to 3.8%, while prices for non-food items dropped 1.3% on year.
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Tags: consumer confidence, housing market, Nationwide, poll, research, survey
Terrorism fears and higher gasoline prices unexpectedly drove confidence among U.S. consumers this month to its lowest level since October.
The University of Michigan’s preliminary index of sentiment declined more than forecast, to 78.7 from 84.7 in July. Waning optimism threatens to slow consumer spending, which accounts for about three-fourths of gross domestic product.
The survey ends a week of figures pointing to a continuing slowdown in the economy that may allow the Federal Reserve to keep interest rates unchanged after ending a two-year credit tightening last week. The conflict in Lebanon, which drove energy prices higher, and news of a foiled plot to blow up airliners probably contributed to the decline in confidence, economists said.
“The headline news about the foiled terror plot and high gasoline prices are rattling consumer attitudes,” said Richard Yamarone, chief economist at Argus Research in New York. “This helps the Fed’s cause of pausing in the interest-rate cycle.”
By Shobhana Chandra
Pedro Joaquin Sanchez Belmar
Comment by Pedro Joaquin Sanchez Belmar — August 6, 2009 @ 8:37 pm