US consumer confidence dropped in June after rising for three months, adding to the view the economic recovery is slowing, while home prices unexpectedly climbed in April. The report Tuesday from The Conference Board, an industry group, showed the drop in confidence came from worries about the labor market which has been one of weakest areas of the US economy.
The group's index of consumer attitudes fell to 52.9 in June from a downwardly revised 62.7 in May. The June figure was sharply below the median of forecasts from analysts polled by Reuters.
Assessment of the labor market also worsened, with the “jobs hard to get” index rising while the “jobs plentiful” index slipped.
“There remain a lot of questions around the sustainability of economic growth,” said Sean Simko, fixed-income portfolio manager in Oaks, Pennsylvania.
The confidence report was at odds with last Friday's consumer sentiment data from the Thomson Reuters/University of Michigan Surveys of Consumers. That survey showed sentiment in June rose to its highest since January 2008.
Tuesday's report comes just days ahead of the government's monthly data on employment, one of the most widely watched economic indicators. The report this Friday is forecast to show non-farm payrolls fell in June, according to a Reuters survey.
President Barack Obama, in a wide-ranging Oval Office meeting, said he and Federal Reserve Chairman Ben Bernanke agree the economy is strengthening and is in recovery but that more needs to be done, particularly on the job front.
US stocks fell sharply, with the Standard & Poor's 500 index .SPX finishing down more than 3.0% and at its lowest close in about eight months. The US dollar rose against a basket of currencies .DXY while U.S. Treasury debt prices advanced.
In another report, Standard & Poor's/Case Shiller home price indexes showed an unexpected rise as a rush to take advantage of the federal tax credit for home buyers pushed prices up before the credit expired at the end of April.
The S&P composite index of home prices in 20 metropolitan areas for April rose 0.4% on a seasonally adjusted basis, compared with a forecast for a 0.1% decline, after a downwardly revised 0.2% drop in March. March prices were previously reported as unchanged.
On an unadjusted basis, prices gained 0.8% in April following March's 0.5% drop. A 0.2 percent rise was forecast in a Reuters poll.
Home sales have fallen since the April 30 end of tax credits. The housing market has yet to show signs of a sustained recovery.
“Inventory data and foreclosure activity have not shown any signs of improvement,” David Blitzer, chairman of S&P's index committee, said in a statement. (Reuters)