US consumer confidence crept higher in July from the previous month's 16-year low as worries over inflation receded slightly, the Conference Board said on Tuesday. The Conference Board said its overall monthly measure of consumers' mood rose to 51.9 this month - the first rise since December - from an upwardly revised 51.0 in June, which was the lowest since 47.3 in February 1992.
Economists polled by Reuters had expected a reading of 50.0 for July. The 72 forecasts ranged from 48.0 to 53.0. June's reading was originally reported at 50.4. The Conference Board, an industry group, said its gauge of inflation expectations edged lower to 7.6 percent after hitting a record high of 7.7 percent in May and June.
Federal Reserve policy makers are likely to pay particularly close attention to this development since they have expressed concerns over keeping expectations for price growth in check. Consumers continued to make a grim assessment of their present situation, though their view of future prospects improved. The present situation index dipped to 65.3 from a slightly upwardly revised 65.4. The expectations barometer firmed to 43.0 from an upwardly revised 41.4 in June, which was a record low.
HOME PRICES FALL: Prices of US single-family homes plunged at a record pace in May from a year earlier, with each of the 20 regions monitored showing annual declines for a second month, according to the Standard & Poor's/Case Shiller home price indexes reported on Tuesday.
The S&P/Case Shiller composite index of 20 metropolitan areas fell 0.9 percent in May from April, bringing the measure down 15.8 percent from May 2007. The decline was slightly less than expected and not as severe on a monthly basis as in April. Seven regions showed increases on a month-over-month basis, providing a "possible bright spot" for US housing that otherwise continues to weaken, S&P said.
Expectations that prices will continue to fall into 2009 also makes refinancing of loans tougher, leaving homeowners in high-cost mortgages peddled during the housing boom. Economists surveyed by Thomson Reuters expected the monthly and annual drops would be 1 percent and 16 percent, respectively. S&P said the composite index of 10 metropolitan areas fell 1 percent in May, for a 16.9 percent year-over-year drop.
Regions that saw some of the largest gains during the housing boom, such as Miami and Las Vegas, were the worst performing markets in May. Miami home prices fell 3.6 percent in May from April for a 28.3 percent annual drop. In Las Vegas, prices in May slumped 2.9 percent, for a 28.4 percent decline from a year earlier.