Brusca said some analysts make too much of the decline in housing prices.
“Housing prices are down by a miniscule amount,” he said. “People make a big deal out of [it], but we’ve got low inflation so it’s easier for housing prices to fall. We’ve had bigger declines in real house prices in the past. These are minor declines after the big increases in the past years. Consumers still feel wealthy. The stock market is going up. There’s a lot of consumer wealth -- the consumer feels great.”
The University of Michigan said Friday that its consumer sentiment index climbed to 92.4 in July, eclipsing the 86 expected by economists.
Stuart Hoffman, chief economist at PNC Financial Services Group, urged a little caution when sizing immediate economic prospects.
“I don’t think there’s anything fundamentally wrong with the consumer, as jobs and income are rising,” Hoffman said. “But I think you have to be a bit more tempered. I think the house price decline is only going to get deeper in the second half of the year and become more meaningful."
Hoffman continued, "I do think high gasoline prices, concerns about the housing market, have tempered consumer spending and I expect it to be a bit more cautious in this second half of the year and give us GDP growth that’s a little below trend, a little below what I think the Fed is going to tell us next week.”