Economy Watch: Consumers Feeling a Bit Peppier
- May 26, 2010
May 26, 2010
By Dees Stribling, Contributing Editor
Consumers are headed for the sunny side of the street, according to the Conference Board, though its phrasing is a little less poetic. For the third month in a row, consumer confidence is up, says the organization.
Economists, ever a gloomy lot, had predicted a reading of 59 for May, but the index rose to 63.3, compared with 57.7 in April. The organization’s Present Situation Index increased to 30.2 from 28.2, and its Expectations Index improved to 85.3 from 77.4 last month. Expectations, it seems, are at pre-recession levels.
“The improvement has been fueled primarily by growing optimism about business and labor market conditions,” noted Lynn Franco, director of the Conference Board Consumer Research Center, in a statement. “Income expectations, however, remain downbeat.”
Housing Prices Edge Lower Overall, But Not Everywhere
Consumers might be a little more cheerful these days, but it isn’t because housing prices have started rising. The latest S&P/Case-Shiller composite index of 20 U.S. cities, released Tuesday, reflected a decline in prices of 0.5 percent in March when compared with February. It was the sixth straight monthly decline for the index.
On the other hand, the index was up 2.3 percent in March 2010 when compared with a month no one likes to remember, March 2009. (Pretty much every month in 2009 could probably be described that way.)
Places like San Francisco, San Diego and Los Angeles showed some strong year-over-year price growth, according to S&P/Case-Shiller, up 16.2 percent, 10.8 percent and 6 percent, respectively. It isn’t clear yet, however, whether those particular markets were responding to such drivers as the now-expired federal tax credit with price increases that are only temporarily defying the law of gravity.
Seniors Housing Occupancies Dip
According to the National Investment Center for the Seniors Housing & Care Industry, occupancy rates fell for seniors housing in the first quarter of 2010, while rent growth continued, but at a slower pace than in the previous two years. The average occupancy rate fell to 88 percent for seniors housing–both independent living and assisted living properties–during the first quarter of 2010, down from 88.3 percent in 4Q09.
Still, seniors housing owners aren’t doing so badly when it comes to rents. NIC also reported that year-over-year rent growth for seniors housing in the first quarter of 2010 was 1.5 percent, which is slower than the pace a year ago (2.6 percent) and two years ago (3.7 percent), but probably still the envy of property types that haven’t seen any occupancy or rental growth in quite a long time, such as the hotel industry. Or offices. Or retail properties.
The world is a fretful place these days, from Greece to Thailand to Korea, and so Wall Street frets too. The Dow Jones Industrial Average spent much of Tuesday far below 10,000, but climbed upward, gyrating all the way, to end down only 22.82 points, or 0.23 percent. The S&P 500 actually eked out a 0.04 percent gain, while the Nasdaq lost 0.12 percent.