US consumer confidence dims, home prices advance in May

Written by Reuters | New York | Updated: Jul 29 2010, 09:21am hrs
US consumer confidence sank in July to its lowest since February on job market worries, underscoring the slow path to economic recovery, and home prices rose in May but without signs of a sustained rebound, reports released on Tuesday showed.

The Conference Board, an industry group, said consumer attitudes worsened this month as did their expectations about jobs being hard to get.

The groups index of consumer attitudes fell to 50.4 in July from an upwardly revised 54.3 in June, below the median forecast of 51 in a Reuters poll.

There have been quite a few headwindsthe fiscal stimulus is fading, the European situation certainly did have an impact on consumer confidence and inventories are being brought more into line, said David Sloan, economist at 4Cast Ltd in New York. But clearly the big problem for consumers is jobs.

US Treasuries trimmed losses and stocks pared gains after the dim consumer confidence reading as investors bought safe government assets.

Concerns about business conditions and the labor market are casting a dark cloud over consumers that is not likely to lift until the job market improves, said Lynn Franco, Director of The Conference Board Consumer Research Centre. US single-family home prices rose more than expected in May, still reflecting robust spring sales spurred by now-expired homebuyer tax credits, Standard & Poors/Case Shiller home price indexes showed on Tuesday.

May is a strong seasonal period for home sales, S&P said, and buyers who rushed to sign contracts by the April 30 deadline for up to $8,000 in tax credits have until Sept. 30 to close loans.