As U.S. markets remained closed on Memorial Day, today’s focus is the New York-based The Conference Board’s monthly survey on American consumers sentiment at 4pm CET. In April confidence unexpectedly rose to 68.1 points on an improved labor market outlook, lower gasoline prices as well as the continuing recovery in the U.S. housing market. Rising home and stock prices are helping repair finances left in tatters by the recession, leading to gains in sentiment that may limit any slowdown in household spending, the biggest part of the economy.
For now, an increase in the payroll tax and cuts in federal outlays may be starting to pinch, prompting a slackening in manufacturing that is restraining growth. According to Bloomberg, analysts predict the confidence gauge to make an advance to 71 in May. Another report may confirm the recovery in residential real estate. The S&P/Case-Shiller index of home prices in 20 cities probably rose 1% month-on-month in March, after a 1.24% increase in February. Compared to the same period a year earlier, housing prices rose 9.3% in February, the biggest year-to-year advance since 2006, and are forecast to have increased 10.2% in March. “Home prices continue to show solid increases and housing continues to be one of the brighter spots in the economy,” David Blitzer, chairman of the S&P index committee, said in April.