S&P house prices showed in July a third consecutive rise, suggesting that the housing market is on the mend. The 20 cities index rose to 144.23 from 141.94. In yearly terms, the decline slowed to -13.3% following a 15.4% decline in June. The increase was broad-based with only two of the twenty metropolitan areas, notably Seattle and Las Vegas, still recording a monthly decline.
September Consumer confidence index (Conference Board) unexpectedly slipped to 53.1 from 54.5 previously with both the present conditions and the expectations sub-indices contributing to the lower headline reading. The market was looking for a rise to 57. The report is at odds with a similar sentiment report from the Michigan University that showed a decent improvement in September and with some other reports. It might also be more a correction of the steep increase in August than a signal consumer confidence is again on a downward path. While both sub-indices contributed to the decline, it was principally the present situation index that saw the biggest decrease to 22.7 from 25.4 previously and is barely above the cycle low of 21.9 reached in March. The expectations index shed only 0.5 points to 73.3, which is still way above the low of 27.3 in February. So, while consumers remain optimistic about the outlook, they don’t see much of an improvement yet. The details show that consumers’ appraisal of the labour market deteriorated somewhat, which might be an indication about the outcome of Friday’s payrolls report.
EMU: Economic confidence improves, CPI declines
The EU Commission confidence survey confirmed an improving of sentiment in September. The outcome was very close to expectations. The headline economic confidence index rose by 2 points to 82.8, the sixth consecutive monthly rise bringing the index to its highest level since October 2008. It was however the smallest monthly increase since it reached its bottom one year ago. The index is also still 16 points from its 20-year average. The consumer, industrial and service confidence all contributed evenly to the advance of the headline index. At the margin the survey was somewhat better than the PMI survey, but the latter slightly leads the former and suggests that the October economic confidence survey may show a further slowing of the improvement. The EU business climate indicator for September confirmed the PMI survey by showing a less than expected gain to -2.07 from -2.21 previously and compares to a consensus estimate of -1.92.
The Retail PMI index rose slightly to 48.6 in September from 47.1 in August. The index is near its long term average (49) and up from a 40.6 low in November 2008. In recent months, the improvement stalled.
The Belgian and Spanish CPI reports for September confirmed the German report, released on Monday that showed that prices actually declined. Indeed, Belgian CPI declined by 0.26% M/M and by 1.19% Y/Y, following a rise by 0.31% M/M and a decline by 0.78% Y/Y previously, while the flash Spanish HICP declined to -1% Y/Y from -0.8% Y/Y previously.
