Bullish consumers, rising home prices brighten U.S. growth picture | Pound Ridge Real Estate

 

U.S. consumer confidence surged to a six-year high in March and house prices increased solidly in January, positioning the economy for stronger growth after a weather-induced soft spot.

The upbeat outlook, however, was dimmed somewhat by other data on Tuesday showing new home sales at a five-month low in February, partly because of cold temperatures.

“The economy is showing signs of shaking off the weather effect. We are going to get a big lift to second-quarter growth from the weather,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester Pennsylvania.

The Conference Board said its index of consumer attitudes rose to 82.3 from 78.3 in February. That is the highest level since January 2008, just as recession started to take hold, and it beat economists’ expectations for a reading of only 78.6.

The jump in confidence bodes well for the economy’s prospects, even though consumers were less upbeat about the labor market.

U.S. stocks and the dollar rose in response to the confidence report.

An unusually cold and snowy winter has held back the economy, disrupting activity ranging from hiring to spending and manufacturing. Growth in the first quarter is expected to have slowed considerably from the fourth-quarter’s annualized 2.4 percent pace.

Separately, the S&P/Case-Shiller composite index of home prices in 20 metropolitan areas rose 0.8 percent in January on a seasonally adjusted basis. It followed a similar increase in December. Prices rose 13.2 percent from a year ago.

 

 

http://www.reuters.com/article/2014/03/25/us-usa-economy-idUSBREA2O10I20140325