US consumer confidence fades further in August

WASHINGTON: US consumer confidence continued to deteriorate in August, falling below the level seen in the early weeks of the pandemic as coronavirus cases rise, according to a survey released on Tuesday.

After dropping in July, the Conference Board's consumer confidence index fell further to 84.8 in August from 91.7 the month prior as sentiment about the present situation and near-term prospects worsened further.

The survey showed attitudes about "both business and employment conditions had deteriorated over the past month," said Lynn Franco, The Conference Board's senior director for economic indicators.

"Consumers' optimism about the short-term outlook, and their financial prospects, also declined and continues on a downward path," Franco said.

And while spending has rebounded in recent months, "Increasing concerns amongst consumers about the economic outlook and their financial well-being will likely cause spending to cool in the months ahead."

With the White House still unable to resolve its impasse with Democratic leaders in Congress over a new spending package after expanded unemployment benefits and other aid measures expired at the end of July, survey respondents were more pessimistic about their job prospects as well.

Optimism had picked up in June as the pandemic lockdowns seemed to be working, but as more businesses reopened and the debate over mask use turned political, the country saw a surge in Covid-19 infections in July.

The pandemic has now claimed nearly 180,000 lives in the world's largest economy, and August has been marked by several aborted attempts by major universities to reopen as usual, forcing them to return to online classes.

"We suspect that still-widespread Covid-19 infections are undermining confidence, and the expiration of federal unemployment benefits is also dampening spirits," Kathy Bostjancic of Oxford Economics said in an analysis.

The survey showed a smaller proportion of consumers expected more jobs in the months ahead while a higher share expect their incomes to decline.

"Households are becoming more cautious in their outlook for continued healing in the economy," Bostjancic said.

Meanwhile, sales of new homes leapt 13.9% in July compared to the prior month, demolishing expectations as the US housing market continues to heat up.

The sales pace surged to an annual rate of 901,000 single-family homes sold, more than 36 percent above July 2019, the Commerce Department reported.

Sales have been helped by very low borrowing rates, but the results were uneven, with sales in the Midwest jumping an eye-popping 58.8%, while the Northeast posted a 23.1% drop. It was the third consecutive month of massive increases, and follows the report last week that existing home sales surged 24.7% for a second straight record.

Strong demand is pushing home prices higher, and the average sales price rose to US$391,300 from US$381,900 in June, even as the median price dipped slightly.

Homebuilders are struggling to keep up with demand, and the supply of new homes on the market fell 13% last month, to the equivalent to just four months supply at the current sales pace, according to the report. – AFP

source https://www.thesundaily.my/business/us-consumer-confidence-fades-further-in-august-IJ3649749