NEW YORK – The economy provided a sobering reminder Tuesday that consumers are jittery and the housing market is still a major cloud over growth. In February, U.S. home prices fell their steepest in almost 15 years. Sales of existing homes plunged in March by the largest amount in nearly two decades. And consumer confidence in April crumbled to its lowest since August. It was a hat trick of bad economic data that analysts said would trap the Federal Reserve between inflation pressures and tepid growth. “The Fed is still talking tough on inflation but I think they are watching the slowdown in the economy. They would not want to raise rates if the economy remains weak,” said Gary Thayer, chief economist at AG Edwards & Sons Inc. The poor economic data also offset the positive feeling investors were getting about better-than-expected first-quarterly reports from the likes of International Business Machines Corp. and DuPont Co. The Dow Jones industrial average slipped in early trading before recovering in the afternoon, adding 34.05, or 0.26 percent, to 12,953.46. The National Association of Realtors reported on Tuesday that sales of existing homes plunged in March, reflecting bad weather and increasing problems from loans to people with poor credit. The group said that sales of existing homes fell by 8.4 percent in March, compared to February. It marked the biggest one-month decline since a 12.6 percent drop in January 1989. Also on Tuesday, a housing index released by Standard & Poor showed that U.S. home prices fell 1.5 percent in February from a year ago, the steepest decline in nearly 15 years. The New York-based Conference Board said its Consumer Confidence Index dropped to 104.0, in April, down from a revised 108.2 in March. Analysts had expected a reading of 105. The April reading was the lowest since August, when the index was at 100.2. Given the plunge in housing, and higher prices at the gas pump, consumers have reduced their long-term and short-term expectations for the economy. The Conference Board said that its Present Situation Index, which measures how shoppers feel now about economic conditions, decreased to 131.3 from 138.5 in March. The Expectations Index, which measures consumers’ outlook for the next six months, declined to 85.8 from 87.9. 160Want local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set!
Jittery consumers feel lack of economic confidence