Tuesday, April 24, 2012

More Bifurcation: New Home Sales and Consumer Confidence

The Lehmann Letter (SM)

This morning's bulletins provide additional signs of bifurcation.

New-home sales remain in the doldrums:

While consumer confidence has moved up and out of recession's trough:

Update the charts with these new numbers.

There were 328,000 new homes sold in March, a dip from February's revised 353,000. The chart reveals that those are not bad numbers. There is no sign of a double dip. At the same time you can see that a true expansion has not yet begun.

Consumer confidence was 69.2 in April, about the same as March's 69.5. That seems, like new-home sales, to indicate a plateau. But the chart shows us that there has been some recovery from recession lows.

New Home Sales
(Click on chart to enlarge)

(Recessions shaded)

Consumer Confidence
(Click on chart to enlarge)

(Recessions shaded)

Here is a fair way to summarize: Neither of these indicators provides evidence of robust expansion, but they do tell different stories. Households are more confident than they were several years ago. Unfortunately this confidence has not helped housing. New-home sales are barely higher.

This is evidence of the bifurcated economy. Everything except housing is trying to head north. Unfortunately, without housing, the economy can't move quickly ahead.

(To be fully informed visit http://www.beyourowneconomist.com/)

© 2012 Michael B. Lehmann

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