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Consumer confidence slips
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April 25, 2000: 12:18 p.m. ET
Index falls for third straight month to 136.9; existing home sales rise 1.5%
By Staff Writer M. Corey Goldman
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NEW YORK (CNNfn) - U.S. consumer confidence faltered for a third straight month in April, but looking ahead optimism over economic prospects gained, suggesting recent stock market volatility and rising interest rates haven't doused consumers' outlook on the future.
Separately, the National Association of Realtors said sales of existing homes gained for a second consecutive month last month.
 The Conference Board reported Tuesday that its key gauge of consumer confidence dipped to 136.9 in April, down from a revised 137.1 in March. Analysts polled by Briefing.com had expected the index to slip to 136.0 for the month. The overall index was dragged down by weakness in the present situation index, which fell to 180 in April from 182.5 in March, the Board said.
While weaker for a third straight month, the private business group's index still remained at its fifth-highest level ever, indicating consumers are not overly pessimistic about prospects for themselves or for the economy, now in a record 109th month of uninterrupted expansion. The outlook for conditions six months ahead jumped to 108.2 from a revised 106.8.
"There were expectations for a major decline in the index, which we did not get," Bill Sharp, an economist with Chase Securities, told CNNfn. "If you look at the two components (present and future expectations), it suggests going forward that confidence may actually start to climb again."
Can't discourage spending
To discourage consumers from spending, the Federal Reserve has raised short-term interest rates five times in the past 10 months to boost the cost of borrowing. The Fed's benchmark rate currently stands at 6 percent, and analysts expect the central bank will lift the rate again by another quarter point at its May 16 policy meeting, bringing it to its highest in nine years.
 Offsetting higher rates have been the rising values of investments, wage and benefit gains and the prospect of beefy tax refunds, which were due to the Internal Revenue Service mid-month. While stock market volatility, particularly among high-tech companies, has caused concern among consumers, it hasn't stopped them from being optimistic down the road.
"Whatever stock market effect we've had probably was felt in the present conditions index, but the overall index remains strong," said Lynn Franco, director of the Conference Board's Consumer Research Center. "The boost in optimism, coupled with tax refunds, should continue to fuel spending."
Maybe so, but there were some indications in the numbers that consumer confidence may be starting to slip just a touch, particularly when it comes to finding a new job. The share of respondents who saw jobs as plentiful fell to 52.4 percent from 53.3 percent a month ago. The share seeing jobs as hard to get rose to 12 percent from 10.6 percent.
Home sales rise again
There were also some signs that the Fed's rate increases may be starting to have an effect. The number of respondents who plan to buy a home in the next six months fell to 2.7 percent from 4 percent, the lowest level in more than three years. Those planning to buy a major appliance fell to 27 percent from 31.6 percent, while those planning on picking up a new car slipped to 8.2 percent from 8.5 percent in March.
 Separately, the National Association of Realtors reported that sales of existing homes gained 1.5 percent last month to a 4.83 million annual rate, up from the unchanged reading analysts had expected. In February, sales rose 6.7 percent to a 4.75 million rate.
March's rise in sales came as the rate on the average 30-year mortgage held steady at around 8.25 percent, up from around 6.25 percent a year ago, according to figures released by Freddie Mac. But optimism among consumers that housing prices will continue to rise helped propel the market forward, even as borrowing costs rose, the Washington-based agency said.
Chase's Sharp told CNNfn that a continued rebound in sales in the wake of January's declines coupled with lack of supply of existing homes also likely drove sales higher for the month. (582KB WAV) (582KB AIFF)
Sales rose everywhere in the country except the South. The median price of a resale home rose 0.5 percent to $134,400 in March from $133,700 in February, while the supply of homes for sale rose to 3.3 months from 2.8
months in February. In March, there were 1.34 million houses up for sale, up from 1.2 million a month earlier. 
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