Economy Watch: Home Prices, Confidence Sink
- Mar 30, 2011
March 30, 2011
By Dees Stribling, Contributing Editor
Housing prices continue to have that sinking feeling, according to the latest Standard & Poor’s/Case-Shiller index for 20 major U.S. metro areas. Single-family prices were down 1 percent in the 20 markets from December to January, and 3.1 percent year-over-year, the index noted.
So far, the 20-city index isn’t quite back to its recessionary trough, which was in April 2009, when it was 1.9 percent lower than it is now. But there isn’t any indication that, going forward in 2011, the index isn’t going to sink down toward that level and probably past it. Some observers are predicting another 5 percent drop in the index before anything starts to get better.
Only Washington, D.C. reported a modest monthly increase. Prices in 11 markets reached new post-bubble lows, including Atlanta, Chicago, Detroit, Las Vegas, Miami, New York, Phoenix, Seattle, Charlotte, N.C., Portland, Ore., and Tampa.
Consumer Confidence Sinking Too
The Conference Board reported on Tuesday that its Consumer Confidence Index, which had increased in February as Americans waxed optimistic about the economy, declined in March, as they watched too much TV news. The index now stands at 63.4, down from 72 in February.
Most of the drop was because of expectations, however. Consumers’ assessment of current conditions actually improved in March. Those claiming business conditions are “good” in March increased to 15.1 percent from 12.4 percent, while those claiming business conditions are “bad” decreased to 37 percent from 39.3 percent.
By contrast, a more specialist confidence index, the State Street Investor Confidence Index, which measures investors’ attitude toward risk, was up 6.5 points from last month to 98.3 in March. It’s a global measure, so not all regions were as confident as the others. North American investors gained 10.5 points worth of confidence, while Asia-Pacific investors gained 8.7 points. European investors, on the other hand, are a mite nervous these days, what with various national economies on the Continent ticking like time-bombs. In that region, confidence was down 15 points month-over-month.
Industries on the Eve of Destruction
IBIS World released a report on Tuesday detailing “10 key industries that will decline, even after the economy recovers.” Or, as the title of the report by Toon Van Beeck pessimistically put it, “Dying Industries.” To be dying in IBIS’ estimation, an industry has to have seen consistent contractions in revenue and establishments in the last 10 years, and be forecast to experience further deterioration over the next five years to 2016.
The 10 winners of this dubious distinction are (and many are little surprise): manufactured home dealers; record stores; photofinishing; wired telecom; apparel manufacturing; newspaper publishing; video and game DVD rental; mills; and formal wear and costume rental. In most of these case, both foreign competition and technological changes are eating these industries’ lunch. And breakfast and dinner.
Wall Street rebounded on Tuesday, with the Dow Jones Industrial Average gaining 81.13 points, or 0.67 percent. The S&P 500 was up 0.71 percent and the Nasdaq advanced 0.96 percent.