Consumer confidence slips in November after hitting 18-year high
(Courthouse News) Consumer confidence slipped in November as expectations of softening economic growth next year began to take hold, the Conference Board said Tuesday.
The business research group said consumers expect the nation’s strong economic growth to continue into early 2019, but they less sure of what the long term future holds.
The Conference Board publishes a monthly index that measures consumers’ assessment of current economic conditions and their outlook for the next six months.
On Tuesday it said its consumer confidence index fell to 135.7 in November from October’s 18-year high 137.9.
“Overall, consumers are still quite confident that economic growth will continue at a solid pace into early 2019,” said Lynn Franco, a Conference Board economist in a statement accompanying the index report.. “However, if expectations soften further in the coming months, the pace of growth is likely to begin moderating.”
Economists put great stock in consumer sentiment because their spending accounts for about 70 percent of U.S. economic activity.
The report comes a day after bracing news from General Motors, which announced Monday that it is cutting thousands of jobs in a major restructuring aimed at generating cash to spend on innovation.
The automotive giant expected to cut as many as 14,000 workers in North America and put five plants up for possible closure.
In another sign that the economy is slowing, the latest S&P CoreLogic Case-Shiller 20-city home price index, released on Tuesday, rose 5.1 percent from a year earlier.
That’s down from a 5.5 percent yearly gain in the previous month. It was the sixth straight month that home price increases have slowed.
S&P says the weaker price gains reflect a broader slowdown in the nation’s housing market.
Sales of existing homes rose modestly in October, snapping a six-month streak of declines. But sales are still 5.1 percent lower than they were a year ago. New home sales have fallen for four straight months.
The declines are largely attributed to higher mortgage rates, which have jumped in the past year. The average rate on a 30-year fixed mortgage was 4.8 percent last week, up from 3.9 percent a year ago.
But home prices, even with the slowdown, continue to rise more quickly than incomes. Combined with higher borrowing costs, that has made a home purchase less affordable for many Americans.
Nine of the 20 cities tracked by the index reported lower prices in September compared with the previous month, according to the index.
The largest yearly price increases were in Las Vegas, San Francisco and Seattle, where prices rose 13.5 percent, 9.9 percent and 8.4 percent, respectively. The smallest were in New York, Washington, D.C., and Chicago, where they increased 2.6 percent, 2.9 percent and 3 percent.
There are signs that Seattle’s housing market is finally cooling after years of double-digit price increases. Its home prices fell in September from the previous month for the third month in a row.
Nationwide, a shortage of homes for sale has plagued potential buyers for the past couple of years, but the inventory of unsold homes has crept higher in recent months.