Macro Economic Mashup: Consumer Sentiment Improves a Tad While the Case-Shiller Home Price Index Declines

Markets are flat this morning after macro economic news releases for consumer sentiment and housing:

Consumer Sentiment: Yippee! We Smiled

Consumer Sentiment has been in the can. However, this month the Consumer Confidence Index turned up as much as a cracking smile. The index rose to 50.2 (49 expected) from 48.5 last month.

Lynn Franco, Director of The Conference Board Consumer Research Center, said:

“Consumer confidence, while slightly improved from September levels, is still hovering at historically low levels. Consumers’ assessment of the current state of the economy is relatively unchanged, primarily because labor market conditions have yet to significantly improve. And, despite the uptick in Expectations, consumers continue to be quite concerned about the short-term outlook. Both present and future indicators point toward more of the same in the coming months.”

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Case-Shiller Home Price Index: Status Quo

Don’t smile too long because news on housing prices is sure to damper that consumer sentiment. The S&P Case-Shiller Home Price Index fell 0.2% m-o-m for less of a loss than last month’s 0.6% drop. Year-over-Year prices were up 1.7%, but that’s still less than Wall Street’s expectations for a 2% y-o-y gain.

David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s commented:

“A disappointing report. Home prices broadly declined in August. Seventeen of the 20 cities and both Composites saw a weakening in year-over-year figures, as compared to July, indicating that the housing market continues to bounce along the recent lows. Over the last four months both the 10- and 20-City Composites show slowing growth, after sustaining consistent gains since their April 2009 troughs.”

“The month-over-month growth rates tell the same story. Fifteen of the 20 MSAs and the two Composites saw a decline in the month of August as compared to July levels. The 10- and 20-City Composites fell 0.1% and 0.2%, respectively. Indeed, the housing market appears to have stabilized at new lows. At this time, it does not seem that any of the markets are hanging on to the temporary momentum caused by the homebuyers’ tax credits.”

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