U.S. Housing Sales Soar; Consumer Confidence Plummets

Perhaps people have been looking for a comfortable place in which to sit out tougher economic times.

Americans snapped up new homes at an impressive pace last month. Sales of single-family homes in March were at a seasonally adjusted annual rate of 1.431 million, 12.2% higher than February's revised rate of 1.275 million, the U.S. Commerce Department and the U.S. Department of Housing and Urban Development jointly reported on April 26.

However, the Conference Board's Consumer Confidence Index continued its downward slide this month. The index fell to 97.7 (1985=100) in April, 5.3 percentage points below March's 103. "Less robust current conditions and a more cautious outlook have consumers feeling less confident in April than in March," says Lynn Franco, director of the Consumer Research Center at the Conference Board, a New York-based business research group.

Indeed, both the present situation and expectations components of the overall consumer confidence index declined in April. The present situation index fell to 113.6 from 117 in March, and the expectations index fell to 87.2 in April from 93.7 in March.

"The expectations index is now at its lowest level since July 2003, when it registered 86.3," notes Franco. "Looking ahead, consumers do not anticipate an improvement in economic growth nor in their incomes. And they expect an even tighter job market over the summer months."

The board's consumer confidence index -- along with other consumer confidence indexes -- is closely watched, since consumer spending accounts for about two-thirds of all U.S. economic activity.

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