WASHINGTON (AP) -- Consumer sentiment rose more than expected in August, an indication that Americans' pessimism about the economy may be lifting. Also this morning, home prices posted their first quarterly increase in three years, signaling the housing market has turned a corner.
The New York-based Conference Board says its Consumer Confidence index rose to 54.1 from an upwardly revised 47.4 in July. Economists surveyed by Thomson Reuters had expected a slight increase to 47.5. Still, the index is far below 90, the minimum level associated with a healthy economy.
Economists closely monitor confidence because consumer spending accounts for about 70 percent of U.S. economic activity. Consumer sentiment -- fueled by signs the economy is stabilizing -- has recovered a bit since hitting a record-low of 25.3 in February.
The Standard & Poor's/Case-Shiller's U.S. National Home Price Index released Tuesday rose nearly 3 percent from the first quarter to 133, though that reading is still down almost 15 percent from the second quarter last year.
Home prices are at levels not seen since early 2003. Prices have fallen 30 percent from the peak in the second quarter of 2006.
The monthly index of 20 major cities increased 1.4 percent from May to June to 142, the second straight month the index registered a gain. All but two cities, Las Vegas and Detroit, saw home prices rise, and Dallas and Denver clocked their fourth-straight monthly increase.
Prices, however, have a long way to go to recover completely. Every metro showed annual declines, with fifteen reporting double-digit drops.
The Case-Shiller index is a composite of home price indexes for the nine U.S. census divisions. The 20-city index measures home price increases and decreases relative to prices in January 2000. The base reading is 100; so a reading of 150 would mean that home prices increased 50 percent since the beginning of the index.