Consumer confidence rose to a seven-month high in August, while sales of single-family homes rebounded in July, but these may not be enough to convince the Federal Reserve to hold off a raise hike amid continued market turmoil emanating from China.
The Wall Street Journal reported that Consumer Index rose to 101.5 points, the highest since January due to a positive labor environment, although the paper noted that the survey was conducted before the massive drop in global equities market last week.
Reuters, meanwhile, reported that sales of new-homes surged by more than a fifth from last year. With home builder sentiment at its highest level since November 2005. It noted that the sales are still a third lower than the record 1.4 million sold in July 2005 and below precrisis levels but data on rental prices and potential buyers all point on an uptrend.
Analysts interviewed by Reuters are also upbeat about the economic data as it suggest a strengthening economy even as volatility sweeps through world markets. Market observers, however, said that China's economic travails and Wall Street's decline may affect consumer confidence in the months ahead.
The Journal said the positive economic figures helped U.S. stocks recover in early trading, but the market still ended lower given the international development. It added that the move of China's central bank to cut interest rates for the second time in as many months also helped sentiment.
The paper, however, said the recent market developments and the persistently low inflation may convince the Federal Reserve to reconsider its anticipated first rate hike in nearly a decade.
Reuters noted that the optimism of American consumers may hold as most are not heavily invested in the stock market with data showing that only the top 10% of households increased their stock holdings.
