"Consumers' assessment of current conditions continues to gain ground, and expectations remain in expansionary territory despite the July retreat"
- Lynn Franco, director of economic indicators at the Conference Board
U.S. consumer confidence in the economy declined in July, staying close to the almost five-year high. According to the Conference Board, the consumer confidence index fell to 80.3 from a revised 82.1 in June, missing analysts' forecast of 81.6. Despite the slight decrease, confidence remains above levels reported a year ago. Even though, the short-term employment outlook declined, consumer were more optimistic about the job market's prospects in the coming months. Consumer confidence is a closely watched indicator, since their spending contributes to about 70% of U.S. economic activity.
Meanwhile, home prices were up in May by the most in more than seven years, Standard & Poor's said Tuesday. The S&P/Case-Shiller Composite Home Price Index rose 12.2% from the previous year, the biggest 12-month increase since March 2006, following the 12.1% advance last month. On a monthly basis, the index climbed 1.0% in May after the 1.7% jump in April. The advance in home values is also boosting household finance, which may stimulate consumer spending, the largest component of the U.S. economy. On Monday the NAR published a report indicating a modest decline in pending home sales in June, with the corresponding index edging down 0.4% to 110.9 from a six-year high of 111.3 in May.
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