Economy Watch: A Bit of Optimism From Case-Shiller

The latest S&P/Case-Shiller Home Price Indices showed that on average home prices increased 1.3 percent in the month of April for both the 10- and 20-City Composites.
By Dees Stribling, Contributing EditorThe latest S&P/Case-Shiller Home Price Indices, which were released on Tuesday, showed that on average home prices increased 1.3 percent in the month of April for both the 10- and 20-City Composites. The uptick comes after seven consecutive months of falling home prices as measured by both indices.

On a monthly basis, 19 of the 20 MSAs and both composites rose in April, with Detroit being the only city that saw prices fall, down 3.6 percent. On an annual basis, however, the indices are still trending negative, though not quite as badly as in previous months. April’s data indicate that year-over-year home prices fell by 2.2 percent for the 10-city composite and by 1.9 percent for the 20-city composite.

“With April 2012 data, we finally saw some rising home prices,” David M. Blitzer, chairman of the Index Committee at S&P Indices, noted in a statement. “While one month does not make a trend, particularly during seasonally strong buying months, the combination of rising positive monthly index levels and improving annual returns is a good sign.”

Consumers feeling the blues

Housing might at last be seeing an uptick, but U.S. consumers still aren’t feeling particularly optimistic going into summer. The Conference Board reported on Tuesday that its Consumer Confidence Index, which had declined in May, fell some more in June. The Index now stands at 62.0 (the relatively happy 1985 = 100), down from 64.4 in May.

Consumers surveyed who claimed that business conditions are “good” increased to 14.9 percent from 13.6 percent, while those saying business conditions are “bad” increased to 35.1 percent from 34.7 percent. Consumers’ appraisal of the job market was mixed. Those stating jobs are “hard to get” increased to 41.5 percent from 40.9 percent, while those claiming jobs are “plentiful” increased to 7.8 percent from 7.5 percent.

“Consumer Confidence declined in June, the fourth consecutive moderate decline,” explained Conference Board economist Lynn Franco in a press statement. “Consumers were somewhat more positive about current conditions, but slightly more pessimistic about the short-term outlook.” More-or-less blah, in other words.

Investors unimpressed by euro summit prospects

The supposed big-deal euro-zone summit is around the corner, but investors don’t seem all together impressed by what might happen. On Tuesday, Spain sold a little over $3 billion euros ($3.85 billion) worth of three-month notes, and the yield was 2.362 percent. The last auction of those kinds of notes featured a yield of 0.846 percent. Italian short-term debt was up on Tuesday as well.

U.S. debt, on the other hand, continues to see low yields as investors park money in a perceived safe have, with last summer’s Congressional debt-ceiling antics a dim memory. Also on Tuesday, the U.S. sold a spot of two-year notes ($35 billion worth) and the yield was 0.313 percent. Not quite the record lows of last summer (after the debt ceiling was raised), which were 0.222 percent, but getting there.

On Tuesday Wall Street seemed a bit more gladdened by the housing numbers than fretful about Europe’s woes, with the Dow Jones Industrial Average gaining 32.01 points, or 0.26 percent. The S&P 500 was up 0.48 percent and the Nasdaq gained 0.63 percent.