Consumer Confidence Index
One sign that the economic recession may be over comes from The Conference Board, whose Consumer Confidence Index for March jumped to 110.2 (from 95.0 in February). Both components -- current conditions and future expectations -- rose about 15 points. It's important, however, not to read too much into this jump, because this index measures perceptions, not hard data. A modest recovery with limited job growth could temper consumer confidence in future months.
Existing Home Sales
Although sales of existing homes dropped 2.8% in February, the 5.88 million annualized rate was second only to January's all time record of a 6.05 million rate. Warm weather and low mortgage interest rates have helped boost home sales in the first two months of this year, but expect some downward adjustment in coming months. Housing prices moderated in February but were still 8.2% above those of a year ago.
Mild winter weather helped cause construction unemployment to drop to a seasonally adjusted 7.9% in February from a five-year high of 9.4% in January. A strong new housing market will pressure the construction labor markets for remodelers in most parts of the country.
Inflation in construction costs remains under control, except for lumber. Random Lengths reported that its Framing Lumber Composite Price Index was at $344 on March 22nd vs. $301 a year earlier. The hike reflects shutdown capacity as well as anticipation of a 29% duty imposed on Canadian imports by the U.S. Department of Commerce. However, some shutdown capacity has been reopened and prices should moderate again.
Leading Economic Indicators
The Conference Board's Index of Economic Indicators in February was unchanged after rising in each of the four previous months. The expected modest economic recovery could lead to a flat Index over the next several months. Previous growth pushed the Index up 3.2% from its value a year ago.