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U.S. Consumer Confidence, Home Sales Remain High

By John S. McClenahen Even with U.S. gasoline prices rising dramatically and growing public concern about America's policy in Iraq, consumer confidence is reasonably high. Better job prospects seem to be a major reason. The Conference Board's Consumer Confidence Index edged up two tenths of a percentage point this month and now stands at 93.2 (1985=100), the New York-based business research group reported on May 25. "The pickup in the job market is offsetting the impact of rising gas prices and escalating tension overseas," says Lynn Franco, director of the Conference Board's Consumer Research Center. In its latest representative sample of 5,000 U.S. households, the percentage of people expecting more jobs will become available during the next six months increased to 19.2% in May from 18.3% in April. And the percentage of people expecting fewer jobs dipped to 17.2% in May from 17.7% in April. Some of those people may have been sharing their outlooks for jobs from the comfort of new homes. Sales of existing single-family homes during April were at a seasonally adjusted annual rate of 6.64 million units, 2.5% higher than March's rate of 6.48 million units, the Chicago-based National Association of Realtors (NAR) reported on May 25. April was the third consecutive month sales have increased and the rate was only 0.6% below last September's record rate of 6.68 million units. "Given the favorable economic backdrop and strong sales momentum, a big number was expected for April home sales and it's likely we'll see another big month in May," says David Lereah, NAR's chief economist. "Part of what we're seeing now is 'fence-jumping' from people wanting to buy a home before interest rates move higher."

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