Consumer Confidence Near Record LowThe fear of job losses and more hard times kept consumer confidence at a near record low last month, according to the Conference Board's consumer confidence index. The index increased to 26 in March from a revised 25.3 in February, the lowest reading since data began being recorded in 1967.
A separate report showed home values recorded a historic plunge in January.
With three months of more than 650,000 job losses and shrinking household wealth, the indicators show recent gains in consumer purchases may not be enough to keep the recession from lasting through much of 2009. The lack of consumer confidence may also limit the impact of federal tax cuts and incentives.
Economists predicted confidence would rise to 28 from a previously reported record low of 25 in February.
The Conference Board's confidence survey shows the number of consumers saying jobs are plentiful held at 4.6 percent, the lowest since February 1992. Those saying jobs were hard to get rose to 48.7 percent, a 17-year high, from 46.9 percent in February.
Consumers continue to view their financial well-being in future months with pessimism. Consumers who expect their incomes to rise over the next six months declined to a record 7.5 percent from 7.9 percent in the prior month. The number of those expecting their incomes to fall changed slightly to 23.9 percent, after 24 percent in February. The measure of present conditions fell to 21.5 from 22.3.
Home Prices See Record Drop
The S&P Case-Shiller 20-city housing price index dropped for the 30th straight month. Housing prices in 20 major cities fell at record monthly and annual levels in January, according to the index report, showing prices are down 2.8 percent from December and 19 percent drop from a year earlier.
The S&P Case-Shiller Home Price Index, a comparison of price changes recorded when homes are resold, is considered to be one of the most accurate gauges of market trends available. Its 20-city index has been down for 30 straight months.
All of the 20 metro areas have reported annual declines, and nine of the MSAs (metropolitan statistical areas) have fallen more than 20 percent in the last year. All told, prices have plunged 29.1 percent nationally since they peaked during the second quarter of 2006, according to the report.
Individual metro areas have fared far worse. In Phoenix, home prices have fallen 35 percent year-over-year, while Las Vegas has been down 32.5 percent, San Francisco has been down 32.4 percent and Miami has fallen 29.4 percent.
All 20 index cities were in negative numbers; Dallas is the least affected at a loss of 4.9 percent. Others in single-digit losses were: Denver at 5.1 percent and Cleveland at 5.2 percent.
The country faces historically high foreclosure rates, adding to inventories of homes for sale and also driving down prices. In many markets, a large percentage of the homes being sold are distressed properties, either bank repossessions or short sales.
Much of the sales traffic is in foreclosure inventory, another factor that may be pushing price statistics downward because distressed properties are often in poor condition. Home prices aren't expected to improve any time soon, as analysts see the biggest risk is the health of the overall economy.