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Economy

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Key reports
Consumer confidence: The Conference Board, a New York-based private research group, said its consumer confidence index jumped to 81.4 in June. That’s the best reading since January 2008.
U.S. home prices: Home prices jumped 12.1 percent in April from a year ago, the most since March 2006. The Standard & Poor’s/Case-Shiller 20-city home price index also rose 2.5 percent in April from March, the biggest month-over-month gain on records dating to 2000.
New home sales: Sales of new homes rose 2.1 percent last month compared with April to a seasonally adjusted annual rate of 476,000, the highest level since July 2008, the Commerce Department.
Durable goods: The Commerce Department said orders for durable goods rose 3.6 percent, matching April’s gain.
– Associated Press
Associated Press
Pedestrians walk in and out of the Walgreens flagship store in New York. Americans’ confidence in the nation’s economy reached its highest point in more than five years.

Confidence in US economy reaches 5-year high in June

– The U.S. housing recovery is strengthening. Factories are fielding more orders. And Americans’ confidence in the economy has reached its highest point in 5 1/2 years.

That brightening picture, captured in four reports Tuesday, suggests that the economy could accelerate in the second half of the year. It underscores the message last week from the Federal Reserve, which plans to slow its bond-buying program this year and end it next year if the economy continues to strengthen. The Fed’s bond purchases have helped keep long-term interest rates low.

Investors appeared to welcome the flurry of positive data. The Dow Jones industrial average rose 100 points to close at 14,760, and broader stock indexes also ended the day up. Those gains made up only a fraction of the markets’ losses since Chairman Ben Bernanke said last week that the Fed will likely scale back its economic stimulus within months – a move that would send long-term rates up.

But the rising confidence of U.S. consumers shows that most Americans are focused on a better job market, said Beth Ann Bovino, a Standard & Poor’s economist.

“Maybe households agree with the Fed: the economy is improving,” Bovino said.

The Conference Board said its consumer confidence index jumped this month to 81.4, the highest reading since January 2008. The New York-based research group said consumers appear more encouraged by economic conditions and more optimistic about where the economy and job market are likely headed over the next six months.

Last month, U.S. employers added 175,000 jobs, which almost exactly matched the average increase of the previous 12 months. Steady job growth has gradually reduced the unemployment rate to 7.6 percent from a peak of 10 percent in 2009. And rising home and stock prices since the recession ended four years ago have made many Americans feel wealthier.

The combination has kept consumers spending this year despite higher Social Security taxes and steep government spending cuts that took effect this year.

The survey was completed June 13, so it didn’t reflect the past week’s plunge in stock prices. The market turmoil might lower July’s consumer confidence. Still, many economists say they doubt much effect from the drop.

For most Americans, the biggest investment is their home. And a steady rise in prices is allowing them recover much of the wealth they lost during and immediately after the last recession.

U.S. home prices jumped 12.1 percent in April compared with a year ago, according to the Standard & Poor’s/Case-Shiller 20-city home price index.

More buyers and a limited supply of available homes have lifted prices in most cities. Higher prices have, in turn, fueled further sales and encouraged builders to ramp up construction. A more sustainable housing recovery is contributing to economic growth and creating more jobs.

Sales of new homes rose in May to a seasonally adjusted annual rate of 476,000, the Commerce Department said. That was the fastest pace since July 2008. Though sales of new homes remain below the 700,000 annual rate that most economists consider healthy, the pace has jumped 29 percent from a year ago.

Last week, the National Association of Realtors said sales of previously occupied homes in May surpassed the 5 million mark for the first time since November 2009.

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