Economy Watch: Case-Shiller Reports New Quarterly Lows

By Dees Stribling, Contributing Editor

According to S&P Indices on Tuesday, the latest Case-Shiller Home Price Indices showed that all three headline composites ended the first quarter of 2012 at new post-housing crisis lows. The national composite fell by 2 percent during the first quarter of 2012 and was down 1.9 percent compared with the first quarter of 2011. The 10- and 20-city composites posted annual drops of 2.8 percent and 2.6 percent in March 2012, respectively.

Month-over-month the Case-Shiller changes were small, however, with average home prices in the 10-city composite felling by 0.1 percent compared to February and the 20-city remained essentially unchanged month-over-month. All three composites still posted their lowest levels since the housing bubble to deflate in mid-2006.

The report also noted that five cities—Atlanta, Chicago, Las Vegas, New York and Portland—saw average home prices hit new lows. The only way in which that datum is an improvement over last month is that nine cities reported new lows last month. Also, only three cities—Atlanta, Chicago and Detroit—saw annual rates of change worsen in March.

Consumer confidence dips

The Conference Board said on Tuesday that its Consumer Confidence Index, which had declined slightly in April, fell further in May. The Index now stands at 64.9 (the glad year 1985 = 100), down from 68.7 in April. The Expectations Index declined rom 80.4 to 77.6, while the Present Situation Index decreased from 51.2 last month to 45.9.

Thus consumers’ appraisal of current conditions grew a bit more glum in May. Those respondents claiming business conditions are “bad” increased to 34.3 percent from 33.2 percent, while those saying business conditions are “good” decreased to 13.6 percent from 15.5 percent.

“Consumers were less positive about current business and labor market conditions, and they were more pessimistic about the short-term outlook,” noted Lynn Franco, director of economic indicators at the Conference Board, in a press statement. “However, consumers were more upbeat about their income prospects, which should help sustain spending.”

Investors turn optimistic for the moment

Toward the end of an unusually crummy month, Wall Street bounced upward on Tuesday, apparently following reports that the Chinese government is mulling stimulus measures, though Beijing reportedly said that a 2008-style stimulus wasn’t in the works. Still, any stimulus, or even the rumor of a stimulus, was enough to temporarily counteract the impression, so common lately, that the Chinese economic locomotive is running less vigorously these days.

The Dow Jones Industrial Average gaining 125.86 points, or 1.01 percent, for the day. The S&P 500 was up 1.11 percent and the Nasdaq advanced 1.18 percent.