US Consumer Confidence Anything But

Sept. 28, 2011 - PRLog -- Confidence among American consumers fell to a two-year low in September, while the number of unemployed who reported that it was difficult for them to find work rose to its highest level in almost a decade. According to a report yesterday from the private research of the Conference Board in New York, the Board’s Confidence Index increased to 45.4 compared to the revised figure of 45.2 in April, which turned out to be the lowest since April 2009 when the economy entered into the recession. The report on housing prices showed figures much lower than were predicted in July in annual terms.

According to DT Trading analysts, the report on the level of consumer confidence shows that new employee hires are not increasing, as the world’s biggest economy did not create new jobs in August and the unemployment level remained at 9.1%. DT Trading analysts are predicting that a drop in stock prices, as well as concern that the crisis in Europe will undermine the world economy’s recovery, may together lower Americans’ confidence and increase the risk that consumer spending will decrease during the holiday shopping season. “Consumers remain very concerned about income, employment, and the state of the economy,” said John Herrman, a senior fixed-income strategist at State Street Global Markets LLC in Boston. “All of these factors point to even weaker labor market conditions as we get closer to the end of the year.” Despite the stream of obviously negative news, the US stock market rose for the second day in a row amid speculation that politicians will prevent the spread of the European debt crisis to the rest of the world. The Standard & Poor’s 500 Index rose 1.1% to 1,175.38 at the close of trading at 4:00PM in New York. Nevertheless, DT Trading’s fundamental analysts recommend paying particular attention to the high volatility on the markets when forming trading strategies.

Meanwhile, treasury securities fell, sending yields on 10-year bonds from 1.90% to 1.98% on Monday evening. The S&P/Case Shiller index of property values in 20 US cities fell 4.1% in July, compared to the same month in 2010. The July figures managed to change a little for the better compared to the previous month and adjusted for seasonal fluctuations, thanks to a revision and a slow-down in the rate of foreclosures. According to Moody’s Analytics real estate market analyst Celia Chen, housing prices may soon resume their drop when foreclosures start to again exceed the supply of houses on the market.  Therefore, removing any recovery on the real estate market would speed up the start of a new recession.

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