Raw Finance

On May 26, 2009, the Consumer Confidence report showed a 34.56% increase over last month’s reading. The Conference Board’s sentiment index surged to 54.9, well above forecasts for a reading of about 42 and the biggest gain since April 2003, the New York-based research group said. Last month’s reading saw a 51.67% month over month gain, and tied April 1974 for the strongest monthly increase in confidence in the report’s history (1967). This month’s was the fourth biggest monthly gain ever. There have now only been 9 months out of 446 that showed a month over month increase in Consumer Confidence of 20% or more.

Countering consumers’ optimistic mood, the S&P/Case-Shiller home-price index decreased 18.7 percent from March 2008, matching the drop in the year ended in February. The measure declined 19 percent in January, the most since data began in 2001.

Record foreclosures are depressing the value of other properties, contributing to a slump in household wealth that is hurting consumer spending and the economy. Still, falling prices and mortgage rates have made homes more affordable, helping to stem the slide in sales, which will eventually help prices stabilize. 

“The housing market still has somewhat of a ways to go before it completely bottoms,” Celia Chen, an economist at Moody’s Economy.com in West Chester, Pennsylvania, said in an interview on Bloomberg Television. “Prices I think still will fall a little bit further.”  Although layoffs have eased, the continued reduction of jobs will almost certainly contribute to more foreclosures, making Chen’s prognosis very realistic.