Low Inventory, Q1 2016 GDP, Consumer Confidence
March 29, 2016
Tuesday – March 29
The January Case-Shiller 20-city Home Price Index rose 5.7% year-over-year, in line with estimates and matching December’s 5.7% gain. Prices were up 0.8% month-over-month. The low inventory of homes available for sale has been the key reason for price growth, while low mortgage rates and a steady labor market are fueling demand. San Francisco, Seattle and Portland registered the largest gains year-over-year.
In central bank news, yesterday, the Atlanta Federal Reserve Bank reported that its forecast for Q1 2016 Gross Domestic Product will be a meager 0.6% and comes after yesterday’s disappointing Personal Income and Spending data. The dismal 0.6% growth forecast is down from the faster pace of 2.3% originally projected. On the flip side, San Francisco Fed President John Williams says the U.S. economy remains on track for gradual rate increases, and fears over the impact of a slowing global economy are overdone.
The Conference Board reported on Tuesday that March Consumer Confidence rose to 96.2 from the 94.0 recorded in February. The uptick was due to consumers feeling more optimistic as a result of the stabilization in the U.S. Stock markets. The survey went on to say that consumers do not see any big improvements in the economy, but also don’t see it getting any worse. In addition, consumers’ outlooks for the labor market were more favorable.