The Final reading of the Sept U of Michigan confidence number was 3 points higher than expected at 73.5, up from the initial figure of 70.2 and from 65.7 in Aug. It’s at the highest level since Jan ’08. Both Current Conditions and the Economic Outlook rose from the preliminary report and from Aug. Of interest, one year inflation expectations fell to 2.2% from 2.8% in Aug and 2.6% in the preliminary Sept survey. It’s the lowest since March. Confidence is always anecdotal in nature and the question is always whether consumers act on how they feel in terms of spending money based on how they feel about the economy, their personal finances and the cost of goods.
Aug New Home Sales totaled 429k annualized 11k less than expected and up a touch from a revised 426k in July. Months supply fell to 7.3 from 7.6 and is the lowest inventory to sales ratio since Jan ’07. The absolute number of homes for sale fell to 262k from 270k, the lowest since 1983. Sales fell in the Northeast and Midwest, remained unchanged in the South and rose in the West. The median price fell 11.7% y/o/y. Today’s figure measures the contract signings of new homes and builders have been in major competition with foreclosures but have been helped by the tax credit whose fate is now uncertain past Nov 30th. Buyers who sign a contract to buy a home today will likely not be able to close by Nov 30th and will not be able to capture the credit and it’s possible that the Aug housing sales data began to show the hangover from the initial tax credit sales boost in Q2.