U.S. Consumer Confidence Bounces Back, House Prices Rise
Consumer confidence bounced back in May, but households were a bit pessimistic regarding their short-term income prospects even as they expected strong job growth to persist, which could restrain consumer spending.
The Conference Board said its consumer confidence index increased 2.4 points to a reading of 128.0 this month from a downwardly revised 125.6 in April. The index was previously posted at 128.7 in April.
U.S. financial markets were little moved by the data amid a deepening political crisis in Italy. The dollar climbed to a 10-month high versus the euro, while U.S. Treasury yields dropped. Stocks on Wall Street fell, with the S&P 500 and Dow Jones Industrial Average hitting near three-week lows.
The Conference Board's so-called labor market differential, derived from data on respondents' views on whether jobs are plentiful or difficult to get, rose to 26.6 in May, the best reading since May 2001, from 22.7 in April.
That measure, which closely correlates to the unemployment rate in the Labor Department's employment report, suggests that labor market slack continues to shrink.
However, consumers were less upbeat about their short-term income prospects. The share of consumers expecting an improvement in their income dropped to 21.3 percent in May from 21.8 percent in April. The proportion expecting a decline rose to 8.2 percent in May from 7.9 percent in the previous month.
A separate report showed the S&P CoreLogic Case-Shiller composite index of home prices in 20 metropolitan areas rose 0.5 percent in March after climbing 0.8 percent in February. House prices were up 6.8 percent in the 12 months to March after rising by the same margin in February.
The strong gains are at odds with recent data which had suggested a cooling in house prices. The Federal Housing Finance Agency reported last week that house prices were slightly higher by 0.1 percent in March from February.