Elgin Area Chamber Of Commerce: Consumer Confidence Rises, Senators Unveil Corporate Tax Plan, New Construction Home Sales Increase

Press release from the Elgin Area Chamber of Commerce:

October 27, 2021

Consumer confidence gained before the holiday shopping season. (Getty Images)

By Richard Lawson
CoStar News
 
Consumer Confidence Rises
 

In what could be a good sign for holiday spending, a closely watched consumer confidence index increased in October to reverse three consecutive months of decline.

The Conference Board, a nonprofit business membership and research group, reported Tuesday that its consumer confidence index rose 4 points to 113.8 from September, which was the lowest point in seven months. Consumers were more optimistic about their present situation as well as their expectations for the next six months on business conditions, income and job prospects.

Lynn Franco, the organization’s senior director of economic indicators, said in a statement that short-term inflation concerns reached a 13-year high but had little impact on confidence.

“The proportion of consumers planning to purchase homes, automobiles, and major appliances all increased in October — a sign that consumer spending will continue to support economic growth through the final months of 2021,” Franco said.

For the travel industry, 47.6% of respondents in the survey said they plan to take a vacation in the next six months, which is the highest level since February 2020. Franco said that is a “reflection of the ongoing resurgence in consumers’ willingness to travel and spend on in-person services.”
 
Senators Unveil New Corporate Tax Plan
Three U.S. senators unveiled details Tuesday of a 15% corporate minimum tax on the country’s largest companies to help pay for President Biden’s so-called soft infrastructure plan that proposes a slew of social spending programs.

Massachusetts Democratic Sen. Elizabeth Warren, Maine independent Sen. Angus King and Ron Wyden, an Oregon Democrat who chairs the Senate Finance committee, plan to offer up their proposal to apply the tax to companies that publicly report more than $1 billion in profits annually.

“Our proposal would tackle the most egregious corporate tax dodging by ensuring the biggest companies pay a minimum tax,” Wyden said in a statement.

Their proposal calls for preserving the value of business credits, including for research and development, housing and clean energy. But it also would “carry forward losses, utilize foreign tax credits, and claim a minimum tax credit against regular tax in future years,” according to the announcement.

Democrats continue to haggle over the infrastructure bill, whittling it down from the original $3 trillion to $1.75 trillion and possibly lower, with two Democrats, Sen. Joe Manchin of West Virginia and Sen. Kyrsten Sinema of Arizona, leading the way. Sinema has opposed raising taxes on corporations and the wealthy.
 
New Construction Home Sales Increase
Buyers looking for new construction homes in September drove sales higher to soundly beat forecasts.

The Commerce Department, along with the Department of Housing and Urban Development, reported sales increased 14% in September from August to an annual rate of 800,000. Forecasters had projected 760,000.

Still, though, September’s numbers were 17.6% lower than September 2020 when construction was roaring until supply shortages and higher materials costs pushed home prices higher and tempered demand.

While sales are lower than last year, the median price is pushing higher. In September, the median price came in at $408,800, substantially higher than $344,400 from a year earlier.

“Limited existing inventory and low interest rates are keeping demand strong, and more potential buyers may be coming off the fence as they expect interest rates to rise in the future,” Chuck Fowke, chairman of the National Association of Home Builders, said in a statement.

Source: CoStar Group, www.costar.com

This press release was produced by the Elgin Area Chamber of Commerce. The views expressed here are the author’s own.