Some shakiness is being detected in the U.S. economy, according to several different reports, as consumer confidence and home prices declined, even as the overall employment situation improved during the first month of 2012.
The Conference Board reported that its Consumer Confidence Index metric retreated in January to 61.1 after increasing to 64.8 in December last year. Those claiming business conditions are “good” decreased to 13.3% from 16.3%, while those stating business conditions are “bad” increased to 38.7% from 33.5%.
The group also noted that the proportion of consumers anticipating business conditions to improve over the next six months decreased to 16.6% from 16.8%, while those expecting business conditions will worsen increased to 15.1% from 13.4%.
“Consumers’ assessment of current business and labor market conditions turned more downbeat and is back to November 2011 levels,” noted Lynn Franco, director of the board’s Consumer Research Center. “Regarding the short-term outlook, consumers are more upbeat about employment, but less optimistic about business conditions and their income prospects. Recent increases in gasoline prices may have consumers feeling a little less confident this month.”
According to data tracked by the Energy Information Administration, the U.S. average price for gasoline shot up over five cents per gallon during the last two weeks of January to nearly $3.44/gal., while average retail prices for diesel stayed relatively flat at $3.85/gal.
Home prices also declined as 2011 drew to close – the reverse of the trend experts hoped to see. Data collected through November 2011 for the S&P/Case-Shiller Home Price Indices showed declines of 1.3% for both the 10- and 20-city composites in November over October.
“Despite continued low interest rates and better GDP [gross domestic product] growth in the fourth quarter [of 2011], home prices continued to fall, with weakness in 19 of 20 cities,” said David Blitzer, chairman of the Index Committee at S&P Indices. “Nationally, home prices are lower than a year ago, with the 10-city composite down 3.6% and the 20-city down 3.7% compared to November 2010. The trend is down and there are few, if any, signs in the numbers that a turning point is close at hand.”
The one positive sign came from employment data tracked by the U.S. Bureau of Labor Statistics, which said total nonfarm payroll employment rose by 243,000 in January – pushing the unemployment rate down for the fifth straight month to 8.3%.
That being said, consumer assessment of the labor market is less positive than at the end of 2011, with the Conference Board noting that saying jobs are “plentiful” decreased to 6.1% from 6.6%, while those claiming jobs are “hard to get” increased to 43.5% from 41.6%, according to its CCI survey.