The Conference Board reported that consumer confidence dipped slightly from 69.5 in March to 69.2 in April. This relatively flat reading follows the decline last month, reflecting continued anxieties on pocketbook issues such as employment and income. Americans remain cautiously optimistic about the future, with sentiment today much stronger than last fall, and yet, headwinds remain which prevent consumers from becoming more at ease.
It is also clear from this survey that reduced confidence has impacted individuals’ buying plans. The purchasing intentions for automobiles, homes and appliances were all lower. It is likely that people are reacting to pricing pressures, particularly with higher energy costs of late. Inflationary pressures, for instance, remain elevated.
Somewhat related were today’s new home sales figures. The Census Bureau and the U.S. Department of Housing and Urban Development released new data showing a steep decline in new home sales in March. Part of this decline, though, can be explained by the large increase in February. New home sales were 329,000; 353,000 and 328,000 in January, February and March, respectively. In March, strength in the Northeast and South were outweighed by declines in the Midwest and West.
The larger trend remains positive, with new home sales up 7.5 percent over March 2011. There are currently 5.3 months of supply on the market, up from 5 months in February but below the 6.4 months reported just six months ago. The median home price in March was $237,600.
Chad Moutray is chief economist, National Association of Manufacturers.