Consumer Confidence Rises Well Above Forecast, FHFA Down

The Conference Board’s Consumer Confidence Index rose to 54.1 in August, versus a Bloomberg consensus forecast of 48.0, and a previous reading of 47.4.  This is the highest level since December 2007.  The August Present Situation Index rose to 24.9 versus 23.3, while the August Expectations Index rose to 73.5 from 63.4.  Weakness in the labor market continues to weigh heavily on consumer confidence, but is being offset by positive equity performance.

Lynn Franco, Director of The Conference Board Consumer Research Center said, “Consumer confidence, which had posted back-to-back monthly declines, appears to be back on the mend. The Present Situation Index increased slightly, mainly the result of an improvement in consumers’ assessment of the job market. The Expectations Index improved considerably and is now at its highest level since December 2007 (Index, 75.8). Consumers were more upbeat in their short-term outlook for both the economy and the job market in August, but only slightly more upbeat in their income expectations. And, as long as earnings continue to weigh heavily on consumers’ minds, spending is likely to remain constrained.”

Unlike the Case-Shiller Index earlier this morning, The Federal Housing Finance Agency (FHFA) House Price Index fell in 2Q09 by 0.7%, compared to a 0.9% increment a quarter prior. Nevertheless, the majority of housing indicators continue to point toward a bottom and modest recovery for the sector, with the main exception being increasing foreclosure and delinquency rates for all types of mortgages.