Conference Board’s consumer confidence in the US weakened more than expected in August, falling back to the lowest level since April 2009. The headline index dropped from a downwardly revised 59.2 to 44.5, while the consensus was looking for a decline to 52.0. The details show that consumers were especially pessimistic about the expectations (51.9 from 74.9), while the present situation index showed more moderate decline (33.3 from 35.7). Also the labour market index weakened significantly, falling from -39.7 to -44.4, the lowest level since November 2009. The debt crisis in the US, rating downgrade by S&P and renewed fears for a double dip recession probably scared consumers. While spending was strong in July, it will be interesting to see whether the fears for a new recession encouraged consumers to scale back spending in August.
US S&P Case Shiller home prices dropped for a second straight month in June. On a monthly basis, home prices dropped by 0.06% M/M, while the annual rate of decline
slowed from -4.59% Y/Y to -4.59% Y/Y, slightly above the consensus (-4.60% Y/Y). Overall, the data confirm that the US housing market is broadly moving sideways due to ongoing foreclosures, tight credit conditions and weak demand.