Consumer Confidence Falls

News
Tuesday, March 29, 2011 - 2:34pm

New reports show Americans are once again tightening their purse strings.

Consumer confidence fell sharply in February, ending a five-month improvement streak.

Conflict in the Middle East, the Japan earthquake and recovery concerns here at home impacted household spending.

"The fear here is not only the price of filling up the gas tank but also the price of filling up the grocery cart are going to keep going up this spring and possibly the summer and that's what spooked the consumers a little bit this month," says Conference Board senior economist Ken Goldstein.

Other pieces of the economic pie weighing heavily on Americans are jobs, or lack of them.

The unemployment rate stands at 8.9 percent nationwide and analysts say that is preventing a rebound in the housing market.

Home prices for the 10 and 20 city composites dropped last month according to the Case-Shiller Home Price Indexes.

Only two cities, San Diego and Washington D.C., saw home prices move into positive territory.

Meanwhile on Capitol Hill, a Senate banking hearing focused on ways to improve the housing finance system, including a debate on government's role and how to attract private investors.

Federal regulators are working to restore confidence in the market.

The FDIC and Federal Reserve voted Tuesday to advance an exemption rule for banks on certain mortgages that fall under the new federal regulatory law.

The new rule would limit banks exposure on some loans requiring a 20 percent down payment from home buyers.
 

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