WASHINGTON (Reuters) - Consumer confidence fell in March as households worried about inflation, while home prices fell for the seventh straight month in January, pointing to a loss in momentum in the economy.
While rising energy prices and nervousness about the effects of the earthquake and tsunami in Japan are eroding consumer sentiment and chipping away at economic growth, the impact is expected to be temporary. The recovery from remains on track, with the labor market showing some vibrancy.
"Underlying economic growth appears to be good and the job market has been providing signs of further improvement in recent months," said Jim Baird, a partner at Plante Moran Financial Advisors Kalamazoo, Michigan.
"We are likely looking at a continuing pattern of 'two steps forward, one step back' in terms of the collective mood given the sources of uncertainty and risk that will not be easily resolved."
The Conference Board said on Tuesday its overall index of consumer attitudes fell to 63.4 in March from 72.0 in February. That was below economists' expectations for drop to 65.0.
Rising gasoline prices pushed consumer's one-year inflation expectations to the highest since October 2008, indicating households expect general prices to continue rising over the next 12 months.
The cutoff date for the consumer confidence survey was March 16 and sentiment might have been impacted by Japan's devastating earthquake on March 11, which triggered a tsunami and nuclear crisis and roiled global financial markets.
Separately, the S&P/Case-Shiller composite index of home prices in 20 metropolitan areas slipped 0.2 percent in January. The fall was less than market expectations for a 0.4 percent drop. On a year ago basis, prices fell 3.1 percent.
January's fall home in prices left them just above the April 2009 lows.
U.S. financial markets were little moved by the data. Stocks on Wall Street rose on strength in large-cap tech shares, while prices for government debt fell. The U.S. dollar rose against a basket of currencies.
"The housing market recession is not yet over," said David Blitzer, chairman of the index committee at S&P. "At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing."
Eleven of the 20 cities fell to the lowest levels since home prices peaked in 2006 and 2007, while the overall index was just 1.1 percent above the April 2009 low, the report showed.
Unadjusted for seasonal impact, home prices fell 1.0 percent for the month. Only San Diego and Washington, D.C. showed annual price increases.
The Case-Shiller index lags data from the National Association of Realtors, which reported earlier this month U.S. that the median U.S. home price had hit a nine year low in February as home sales volumes plunged 9.6 percent.
In a separate report, the Realtors group on Monday said the volume of contracts for sales of previously owned U.S. homes rose 2.1 percent in February after two straight declines.
The pending contracts data leads existing home sales by a month or two and suggests some of the recent weakness was due to unusually severe winter weather.
(Reporting by Lucia Mutikani, Wanfeng Zhou and Corbett Daly)