–Confidence in Both Current Conditions, Expectations Drop Sharply
–July New Home Sales Jump by 13.9% To 901,000 SAAR, up 36.3% Yr/Yr –Manufacturing Regional Data Mixed, But Further Services Improvement
By Kevin Kastner
WASHINGTON (MaceNews) -The Conference Board’s U.S. consumer confidence index fell to a reading of 84.8 in August from a downward revised 91.7 reading in July. The Conference Board noted that concerns about both employment and business conditions were heightened in the month.
Analysts had expected the August index to rise slightly to 93.0 from the originally reported 92.6 reading in July. The index was at 132.6 in February before the state shutdowns began.
The reading of present situation reading fell to 84.2 in August from 95.9 in July while the expectations reading fell to 85.2 from 88.9.
Lynn Franco, the Conference Board’s Senior Director of Economic Indicators said, “The Present Situation Index decreased sharply, with consumers stating that both business and employment conditions had deteriorated over the past month,” adding that the outlook for employment and business conditions in the coming months also slipped.
“Consumer spending has rebounded in recent months but increasing concerns amongst consumers about the economic outlook and their financial well-being will likely cause spending to cool in the months ahead,” she said.
The percentage of respondents describing current business conditions as “good” fell to 16.4% from 17.5% in July, while those reporting they were “bad” rose to 43.6% from 38.9%.
Those reporting jobs as “plentiful” fell to 21.5% from 22.3%, while those reporting that they are “hard to get” rose to 25.2% from 20.1%. As a result, the gap between the two jobs measures, a closely watched indicator of employment conditions, fell to -3.7 in August from +2.2 in July.
Respondents looking for business conditions to improve over the next six months fell to 29.9% from 31.6%, compared with 20.5% who expect conditions to worsen, up slightly from 20.2%.
Those expecting more jobs in the coming months fell to 29.1% from 29.6% in July, while those looking for fewer jobs rose to 21.9% from 21.3%.
In other data released on Tuesday, the Richmond Fed’s conditions measures showed an increase in the headline manufacturing index to 18 in August from 10 in July
The other regional manufacturing data reported to this point for August have been less optimistic, with the Empire and Philadelphia measures both down. The Markit flash estimate, however, rose further to 53.6 from 50.9.
The Richmond Fed services data showed further improvement in the sector, but with some continued signs of concern. The Philadelphia Fed’s nonmanufacturing index, released earlier, showed a small increase to 1.6 from 0.7 in July, but with declines in the readings for sales and new orders and outright contraction for employment.
The only other nonmanufacturing data released to this point was the flash Markit estimate, which rose to 54.8 from 50.0.
There are other manufacturing and nonmanufacturing regional releases scheduled prior to next week’s ISM releases which should provide some further insight into national conditions.
Regional U.S. Conditions Surveys (sources as stated)
Released at the same time as the Richmond Fed, the pace of new single-family home sales surged by 13.9% to a 901,000 annual rate in July, in line with other housing data that shows record low mortgage rates are fueling demand for new and existing homes.
Sales were up in three of the four regions of the country, with a decline in the Northeast the only exception. Supply was cut further by the sharp demand, falling by 1.6% from June and 8.8% year/year.
Housing data released last week showed that builders are working to raise supply to meet the sharp demand. However, the current shortage has supported prices.
The median new home sales price did decline by 1.9% in July, in contrast to other home price data, but was up 7.2% year/year.
The National Association of Realtors said on Friday that the median sales price for home resales hit a new record high in July while separate reports released earlier Tuesday by Case-Shiller and Federal Housing Finance Agency showed home prices continued to grow in June.
U.S. New Home Sales (seasonally adjusted annual rate)
Source: U.S. Census Bureau
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Contact this reporter: kevin@macenews.com.
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