BOSTON (2/28/13)--Consumer confidence took a leap this month, climbing to 69.6 from a revised 58.4 in January. That, coupled with a surge in home purchases, indicates signs of a rebound the nation's economic growth, said Bloomberg (Bloomberg.com Feb 26).
The index's 11.2-point increase was the largest since November 2011 and offset a 15-point decrease over the past three months. January's reading was better than predicted by all economists surveyed by Bloomberg.
However, one cautioned that "the absolute levels of consumer confidence are still low." Wells Fargo Securities LLC Senior Economist Mark Vitner told Bloomberg that it is important to distinguish between "recovering" and "recovered."
He noted that the reading won't reflect the federal government's sequestration cuts that are expected to take place on Friday because the survey on which January's readings are based ended on Feb. 14--before political discussions on sequestration became more heated as the deadline drew nearer.
Home purchases for January rose 15.6% to an annual pace of 437,000, after a 378,000 pace in December, said the Commerce Department Wednesday.
Also, January pending home sales were at 105.9, the highest reading since the home buyer tax credit deadline in April 2010 and a 4.5% increase over a downwardly revised 101.3 in December, said the National Association of Realtors. "Favorable affordability conditions and job growth have unleashed a pent-up demand to sellers in much of the country," said NAR Chief Economist Lawrence Yun.
"Most areas are drawing down housing inventory, which has shifted the supply/demand balance to sellers in much of the country. It's also why we're experiencing the strongest price growth in more than seven years," Yun added.