Happy days are here again? Or maybe the American consumer isn’t quite that optimistic, but instead is simply glad things don’t seem to be getting a lot worse. In any case, the Conference Board reported on Tuesday that its index of consumer confidence shot up in May to 54.9 from a revised 40.8 in April, marking the largest one-month jump in the index since April 2003. Wall Street, which had something of a lackluster week before Memorial Day, evidently decided that Main Street’s optimism was a cue to buy. On Tuesday, the Dow Jones Industrial Average was up 196.17 points, or 2.37 percent. The S&P 500 gained 2.63 percent and the Nasdaq was up 3.45 percent. Something’s juicing up consumer confidence; what could it be? “Looking ahead, consumers are considerably less pessimistic than they were earlier this year, and expectations are that business conditions, the labor market and incomes will improve in the coming months,” noted Lynn Franco, director of the Conference Board Consumer Research Center. “While confidence is still weak by historical standards, as far as consumers are concerned, the worst is now behind us.” Unless it isn’t. The outlook for housing prices probably isn’t one of the factors in consumers’ upbeat mood, though there is an inking of good news in the Case Shiller Index for March, which recorded a small drop in the rate of decline of home prices, compared with the rate in February. That doesn’t mean housing markets have bottomed out, just that they aren’t contracting as fast as before. Such trends might point to a bottom, but when and how low are still open questions. Fully 15 of the 20 major housing markets that Case Shiller tracks have posted a decline in residential property prices of more than 10 percent from this time a year ago. In the worst of the markets (such as Las Vegas), values have been roughly halved. A spike in consumer confidence isn’t translating into consumers taking their confidence into shopping centers and buying more than they did last year, or even as much. Case in point: 1Q09 same-store sales at Foot Locker Inc., as reported by the company on Tuesday, were down 2.4 percent compared with the same quarter last year. “While the consumer confidence index increased last month, this has not yet retranslated into increased mall traffic,” noted Robert McHugh, Foot Locker CFO, during Tuesday’s conference call. Yet Foot Locker, and a good many retailers like it, seem to be tacking against the adverse economic winds. Though same-store sales were down, the company also reported that its earnings for the quarter compared favorably with 1Q08: 20 cents a share, compared with 2 cents a share (which would have been 14 cents a share, but for a non-cash impairment charge and store closing expenses). In other words, in times of lagging consumer spending, Foot Locker has managed to get a grip on inventories and expenses.<\/p>\n","protected":false},"excerpt":{"rendered":"
Happy days are here again? Or maybe the American consumer isn’t quite that optimistic, but instead is simply glad things don’t seem to be getting a lot worse. In any case, the Conference Board reported on Tuesday that its index of consumer confidence shot up in May to 54.9 from a revised 40.8 in April,…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21825],"tags":[],"class_list":["post-1003976628","post","type-post","status-publish","format-standard","hentry","category-finance"],"acf":[],"yoast_head":"\n