Consumer confidence back to summer ’13 highs
Consumer confidence rebounded to 80.7 in January, its highest level since August of last year, according to the Conference Board. Confidence had rebounded in December as well to a downwardly revised figure of 77.5.
“Consumer confidence advanced in January for the second consecutive month,” said Lynn Franco, director of economic indicators at The Conference Board. “Consumers’ assessment of the present situation continues to improve, with both business conditions and the job market rated more favorably. Looking ahead six months, consumers expect the economy and their earnings to improve, but were somewhat mixed regarding the outlook for jobs. All in all, confidence appears to be back on track and rising expectations suggest the economy may pick up some momentum in the months ahead.”
Specifically, the Present Situation Index increased to 79.1 from 75.3. More consumers assessed business conditions as "good," while fewer decried them as "bad." A similar shift in attitudes toward the availability of jobs was also recorded.
Meanwhile, the Expectations Index was up from 79.0 in December to 81.8 in January. Those expecting business conditions to improve over the next six months were virtually unchanged at 17.4%, but those expecting them to worsen decreased to 12.1% from 13.9%. Fewer consumers expected more jobs in the months ahead, but fewer expected a decrease in jobs availability as well. Those expecting their incomes to increase rose to 15.8% from 13.9%.
In the fall, the partial government shutdown had catalyzed a momentary dip in sentiment, but with confidence back in the 80s, the metric is hovering near pre-recession highs.
New-home sales decline in December
Sales of new single-family homes declined 7.0% in December, down from November’s revised rate of 445,000 to a seasonally adjusted annual rate of 414,000.
The annual story, however, is one of double-digit gains, according to the data released Monday by the Commerce Department. An estimated 428,000 new homes were sold in 2013. That marks a 16.4% increase over the 2012 figure of 368,000.
The news comes shortly after the National Association of Retailers’ existing-home sales report, which showed a slight month-to-month increase in December.
The Northeast produced the slowest sales activity, showing declines of 36.4% compared with the prior month, and declines of 27.6% compared with the prior year. The Midwest experienced the strongest growth trends — up 17.6% for the month, and up 25.0% for the year.
According to Monday’s data, the median sales price of new houses sold in December was $270,200, while the average sales price was $311,400.