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TWO-FER TUESDAY: BLEAK CONSUMER CONFIDENCE, TEPID HOME PRICE GROWTH

Economic data packed a one-two punch on Tuesday, delivering the most pessimistic consumer confidence reading since the Kim and Kanye wedding, while real home price growth sagged.

The mood of the American consumer, who shoulders about 70% of the U.S. economy, unexpectedly darkened to a near 12-year low in the first weeks of 2026.

The Conference Board's (CB) consumer confidence index USCONC=ECI slid 6.6 points in September to land at 84.5, the direst reading since May 2014.

Analysts expected a 1.8-point move in the other direction.

Digging deeper, survey participants' assessment of present conditions deteriorated by 8.0%, while near-term expectations tumbled by 12.7%.

"Confidence crashed in January, and the decline was a big one," writes Carl Weinberg, chief economist at High Frequency Economics, who adds “(The) headline index continues its jagged course toward the southeast corner of the chart."

"The decline is picking up pace," says Weinberg. "Expectations are stalled at a level equivalent to the out months of the financial crisis."

One faint glimmer of hope: data geeks will remember that a yawning gap between the present situation and expectations - as seen in the graphic below - is often a harbinger of recession. So despite the dour headline number, any narrowing of the gulf between the two could be interpreted as good news:

The "jobs confidence" element of the report - which subtracts "jobs hard to find" from "jobs plentiful" - plunged to its lowest level since February 2021, echoing the slowdown in hiring as expressed by the Labor Department's JOLTS report:

Moving to the housing market, home prices in major U.S. cities increased by 0.5% in November, stronger than the 0.2% growth economists predicted.

Year-on-year, the Case-Shiller 20-city composite USSHPQ=ECI unexpectedly heated up, rising 1.4%, up from October's 1.3% annual increase, and 0.2 percentage points north of the 1.2% consensus.

Even so, compared with consumer prices, "real" home prices continue to soften.

"November's results confirm that the housing market has entered a period of tepid growth," says Nicholas Godec, head of fixed income tradables and commodities at S&P Dow Jones. "Home price growth still trails inflation by roughly 1.3 percentage points, meaning real home values have effectively edged down over the past year."

Among the cities in the composite, Chicago and New York once again led the year-over-year gainers, rising 5.7% and 5.0%, respectively. Alas, poor Tampa was the biggest loser for the 13th month running, with home prices in Cigar City dipping 3.9% from a year ago.

(Stephen Culp)

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