US consumer confidence rises but house prices continue to fall
FURTHER evidence of green shoots in the US emerged yesterday as stronger than expected consumer confidence data for May boosted optimism the recession could be nearly over.
The Conference Board’s sentiment index jumped from a revised 40.8 in April to 54.9 in May, well above forecasts for 42, and suggesting underlying improvement in the economy. It is the biggest one-month jump since April 2003 when many Americans believed the war in Iraq was coming to a rapid conclusion.
Fewer Americans said jobs were “hard to get,” the survey found, with that measure slipping to 44.7 per cent from 46.6 per cent.
But economists pointed out that confidence, while better than during the darkest days at the start of the year, remained at historically depressed levels.
“Overall, things are clearly improving, but there is a long way to go before confidence returns to anything like normal,” said Capital Economics economist Paul Dale.
Meanwhile, other US data released yesterday was less positive, with the Standard & Poor’s/Case Shiller index showing US house prices remain in free-fall, plunging 18.7 per cent in March compared to a year ago.
Overall, for the first quarter, prices fell 19.1 per cent, the most in the 21-year history of the survey, reflecting the worst housing recession in generations.