US Conference Board’s consumer confidence weakened unexpectedly in May. The confidence index fell from 68.7 to 64.9, the third consecutive monthly drop, while the consensus was looking for a marginal increase. The breakdown shows that sentiment about both the present situation (45.9 from 51.2) and expectations (77.6 from 80.4) deteriorated in May. Also the labour market differential weakened significantly in May, from -29.7 to -33.1.
According to the Conference Board’s measure, consumer confidence is now at the lowest level in four months, which is in sharp contrast with the Michigan consumer confidence indicator, which rose to a multi-year high this month. The labour market differential suggests that consumers were more pessimistic about the labour market, but also the poor performance of financial markets during the month might have weighed on consumers’ minds.
US S&P Case Shiller home prices rose for a second straight month in March. On a monthly bases, single-family prices rose by 0.09% M/M, down from a 0.15% M/M gain in March and below the consensus estimate, which was looking for an increase by 0.20% M/M. The annual rate of decline, on the contrary, eased more than expected; from -3.54% Y/Y to -2.57% Y/Y. Home prices are very gradually picking up in the US, providing further evidence that the US housing market is bottoming out.