Americans’ confidence in the economy fell this month to the lowest level since April, as many worried about the impact of a 16-day partial government shutdown. The decline could weigh on spending and economic growth.
The Conference Board said Tuesday that its index of consumer confidence dropped to 71.2 in October, down from 80.2 the previous month. September’s figure was slightly higher than initially reported.
Consumers grew particularly pessimistic in their outlook on the economy six months from now, while their assessment of current economic conditions declined by much less. They also expect less hiring in the months ahead. Consumers’ confidence is closely watched because their spending accounts for 70 percent of economic activity.
Americans were more confident in the spring as job gains were healthy and economic growth improved. The Conference Board’s measure reached 82.1 in June, the highest in 5 ½ years. That’s still below the reading of 90 that is consistent with a healthy economy.
Home prices in
big cities are up
Home prices in the nation’s largest metro regions jumped sharply in August, posting yearly gains not seen since the last boom, according to a leading gauge.
The S&P/Case-Shiller index released Tuesday showed that home prices in 20 large U.S. metro areas rose 1.3 percent from July and 12.8 percent from August 2012, beating the expectations of analysts who predicted weaker price gains. Prices haven’t risen this fast year-over-year since February 2006.
Still, there are signs of a cooling. The rate of monthly increases in the 20 large cities peaked in April.
The housing recovery kicked into overdrive earlier this year as families and investors jumped into the market, finally convinced the bottom had passed. Prices shot up rapidly as people battled over a shortage of homes for sale, raising concerns that a bubble was forming in some red-hot markets.
Turkey opens new
Turkey has opened an underwater railway tunnel linking Europe and Asia, and the two sides of Istanbul, realizing a plan initially proposed by an Ottoman sultan about 150 years ago.
The Marmaray tunnel runs under the Bosporus, the strait that connects the Black Sea to the Sea of Marmara and divides Istanbul between Asia and Europe. The tunnel is 8.5 miles long, including an underwater stretch of 4,593 feet.
It is among a number of large infrastructure projects under the government of Prime Minister Recep Tayyip Erdogan that have helped boost the economy but also have provoked a backlash of public protest.
Officials hope that with up to 1.5 million passengers a day, the tunnel will ease some of Istanbul’s chronic traffic, particularly over the two bridges linking the two sides of the city. A more distant dream is that the tunnel may become part of a new train route for rail travel between Western Europe and China.