Conference Board’s consumer confidence surprised on the downside of expectations, showing only a marginal improvement in March. The headline index rose from 25.3 to 26.0, while an outcome of 28.0 was expected. The present situation deteriorated (21.5 from 22.3), while the expectations improved somewhat (28.9 from 27.3). Consumer were especially more pessimistic about labour market conditions, which raises expectations that consumer confidence will remain weak in the coming months.

In March, the Chicago PMI dropped from 34.2 to 31.4, while a marginal improvement was expected. Looking at the details, production (32.7 from 34.7), orders backlogs (21.3 from 29.3) and supplier deliveries (48.4 from 51.0) worsened, while new orders (30.9 from 30.6) and inventories (34.9 from 33.0) improved slightly. Also employment improved from 25.2 to 28.1, while prices came out lower. The index is now at a new cyclical low, but the marginal improvement in new orders might be a positive sign for the coming months.

S&P Case Shiller home prices dropped more than expected in January. On a yearly basis, home prices are down by 18.97% Y/Y, while the consensus was looking for a decline by 18.60% Y/Y. Also the three months’ annualized figure declined further to -26.46% from -24.73%. This might be a bit disappointing after the house prices index showed increase in house prices in January.


EMU: CPI inflation slows to 0.6% Y/Y

The first estimate of CPI inflation came out lower than expected in March. On a yearly basis, consumer prices rose by 0.6% Y/Y from 1.2% Y/Y in the month before, when prices were rising due to the unwinding of strong discounting in January. This outcome is the lowest in the euro zone’s history and clearly below the ECB’s medium term target of 2%. In the coming months, inflation will slow further and is expected to fall into negative territory for some months.

In Germany, the number of people unemployed rose by 69 000 in March, while the consensus was looking for an increase by 52 000. The previous figure was upwardly revised from 40 000 to 50 000. The number of jobs created plunged by 12 000 in February and the number of vacancies dropped by 15 000 in March. The unemployment rate rose to 8.1% (from 8.0%) in March. In the coming months, unemployment is expected to rise further as producers are responding quickly to slowing demand.