U.S. Consumer Confidence Drops as Home Prices Slow Down

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U.S. Consumer Confidence Drops as Home Prices Slow DownU.S. consumer confidence dropped in September, the first decline in five months, while housing prices in July increased at a slower pace than forecasted, indicating that U.S. economic growth remains uneven.

Another data released on Tuesday indicated that business activity in Midwest region fell this month.

“We’re continuing to effectively struggle,” Mike Englund, a Boulder, Colorado-based chief economist at Action Economics, told Reuters. “Some of the optimism that we got in the updraft in consumer confidence in the third quarter was probably a bit overstated.”

Leading industry group The Conference Board reported that its gauge of consumer confidence dropped to 86.0 in September, compared with a revised 93.4 in August. Economists surveyed by Reuters had forecasted a measure of 92.5.

The consumer sentiment took a hit from speculation over the stability of the labor market as well as due to pessimism about economic growth in the next few months.

The Standard & Poor’s/ Case Shiller composite gauge of housing prices in 20 U.S. metropolitan zones rose 6.7 percent in the year through July. Analysts had expected a growth of 7.5 percent. On a monthly basis, the prices in the 20 areas dropped 0.5 percent in July, compared with an expectation of a flat reading.

Meanwhile, the Institute for Supply Management-Chicago index of business activity fell to 60.5 in September, compared with 64.3 the prior month. Economists had expected a reading of 61.9. A measure above 50 is an indicator of expansion.

Stocks fell while the U.S. dollar appreciated, causing jitters among multinationals. Prices of U.S. Treasury dropped. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com