Consumer Confidence Rose in May

The Conference Board Consumer Confidence Index increased in May, following a modest decline in April (after a downward revision). The Index now stands at 128.0 (1985=100), up from 125.6 in April. The Present Situation Index increased from 157.5 to 161.7, while the Expectations Index improved from 104.3 last month to 105.6 this month.

“Consumer confidence increased in May after a modest decline in April,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions increased to a 17-year high (March 2001, 167.5), suggesting that the level of economic growth in Q2 is likely to have improved from Q1.

“Consumers’ short-term expectations improved modestly, suggesting that the pace of growth over the coming months is not likely to gain any significant momentum. Overall, confidence levels remain at historically strong levels and should continue to support solid consumer spending in the near-term,” Franco said.

Consumers’ assessment of current conditions improved in May. Those claiming business conditions are “good” increased from 34.8% to 38.4%, while those claiming business conditions are “bad” decreased from 12.3% to 12%. Consumers’ assessment of the labor market was somewhat mixed. The percentage of consumers stating jobs are “plentiful” improved from 38.2% to 42.4%, while those claiming jobs are “hard to get” also increased, from 15.5% to 15.8%.

Consumers were modestly more positive about the short-term outlook in May. The %age of consumers anticipating business conditions will improve over the next six months decreased from 23.6% to 23.1%, while those expecting business conditions will worsen also decreased, from 9.8% to 8.3%.

Consumers’ outlook for the labor market was mixed. The proportion expecting more jobs in the months ahead increased from 18.6% to 19.7%, while those anticipating fewer jobs also increased, from 13.2% to 13.9%. Regarding their short-term income prospects, the percentage of consumers expecting an improvement declined, from 21.8% to 21.3%, while the proportion expecting a decrease rose from 7.9% to 8.2%.

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