U.S. Economy Strengthen: Higher Consumer Confidence and More Home Sales

The U.S. economy strengthens following the rebound of the U.S. consumer confidence and better-than-expected results of new home sales despite the slowed growth in the first quarter.

Other data such as housing prices have increased steadfastly for the month of February. Positive consumer confidence and rising house prices could counter the performance of consumer spending which sharply broke at the beginning of the year.

A chief economist of MUFG in New York, Chris Rupkey, said Americans have more confidence as the buy new homes which is not just “all talk” and directs the whole economy in the right direction.

There is growth in almost all aspects which improves the overall progress of the economy.

The confidence index from the Conference board reading rose to 128.7 after a downward revision of 127.0 in March. Previously, the index recorded an increase of 127.7 in March. Meanwhile, the confidence surged to 130.0 in February, reaching a 17-year high.  

Short-term expectations of consumers also adjusted at a better rate in April while incomes are expecting to decline in the next few months after reaching the lowest level since December 2000. On the survey based on the labor market differential cited that there were a lot of jobs or not easy to get as it dropped to 22.9 from 23.8 in March.

The figure is relative to the unemployment rate in the Labor Department’s employment report while the jobless rate was recorded to be at 4.1 percent for six consecutive months.

The economy added 103.00 jobs in March, which has been the lowest in six months. Although, economists passed it off as payback for the massive hiring in February. At the same time, the employment growth is at a slower rate.

Since the peak of the cycle to date in February, the economy weakened in the labor market differential for two straight months, according to an economist of JPMorgan in New York, Daniel Silver. Various indicators of the labor market were seen to have cooled off in the previous months.

Consumer confidence still shows to be steadfast despite the volatility of the stock market which was further influenced by the trade war between the United States and China, as well as geopolitical concerns. Referring to the data, the highest confidence was among households with an annual income below $25,000, as well as those in the bracket of $75,000-$125,000.

Yet, the impact to the U.S. financial market was very little by the data.

Earlier gains on the Wall Street stock market moved oppositely as the 10-year U.S. Treasury note surpassed the 3 percent for the first time over the span of four years.

Trades were lower for the price of the U.S. Treasuries while the U.S. dollar Index (DXY) tumbled against other currencies.