Obama nominates Bernanke for second term

President Obama nominated Fed Chairman Bernanke for a second four-year term starting on January 31. Bernanke’s reappointment will have to be approved by the Senate, which seems probable given the endorsement of Senator Dodd, the head of the Senate Banking Committee.

S&P/Case-Shiller US home prices rose q/q in Q2 for the first time since Q1 06

The S&P Case-Shiller home price report showed a notable slowdown in the y/y rate of home price deflation. The 20-city composite rose 1.4% m/m NSA (non-seasonally adjusted) or 0.7% m/m SA (seasonally adjusted) in June, translating to a 15.4% y/y drop compared to -17% in May. Similarly, the national composite rose 2.9% q/q NSA in Q2 or 1.4% q/q SA, pushing the y/y rate down to -14.9% from -19.1% in Q1. This is the first quarterly gain since 1Q06. Of the 20 metro areas surveyed, home prices increased m/m on a seasonally adjusted basis in 15 regions. The biggest gains were in Cleveland (3.3%), San Francisco (3.1%) and DC (2.2%). The home price swing in Cleveland has been muted, leaving prices only down 3.1% y/y. However, both San Francisco and DC experienced a big boom-bust cycle, suggesting considerable healing in both markets. On the downside, home prices in Las Vegas and Detroit fell by 2.9% and 1.1%, respectively.

FHFA US home prices rise in June

The Federal Housing Finance Agency (FHFA) purchase-only house price index increased 0.5% m/m in June, following a 0.6% gain in May. However, this gain did not offset a drop in prices in April and March, leaving the index down 0.7% from Q1 to Q2. This is a slight acceleration from the 0.5% q/q drop in Q1, but still signals a leveling off in home prices with prices only down 6.1% y/y. On a regional basis, home prices fell by the most in the New England Division and were the strongest in the West South Central Division. Prices fell q/q in 38 states and declined y/y in 46 states and Washington, DC.

The FHFA home price index began leveling off in Q1, which contrasted with the steep drop in other measures of home prices at the beginning of the year. However, these measures, such as S&P Case-Shiller, Radar Logic and Loan Performance, have improved significantly in Q2 to show a marked slowdown in the y/y pace of decline. Michelle Meyer

US consumer confidence improves in August

Consumer confidence improved in August to 54.1 from a revised 47.4 in July, above our (48.0) and consensus (47.9) estimates. The rise was led by a jump in the expectations index to 73.5 from 63.4, the highest level since December 2007, when the recession began. Present conditions also improved, rising to 24.9 from 23.3. The labor differential (percent reporting jobs plentiful minus the percent report jobs hard to get) rose to -40.9 from -44.8, indicating modest slowing in labor market contraction. This report suggests that consumer confidence may continue its uptrend after two weaker-than-expected months as the economy moves into recovery.