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Consumer confidence surged in May, with The Conference Board’s Consumer Confidence Index, rising 12.3 points to 98.0, more than a 10-point increase from April.
“Consumer confidence improved in May after five consecutive months of decline,” says Stephanie Guichard, senior economist, global indicators at The Conference Board. “The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards. The monthly improvement was largely driven by consumer expectations as all three components of the Expectations Index—business conditions, employment prospects and future income—rose from their April lows. Consumers were less pessimistic about business conditions and job availability over the next six months and regained optimism about future income prospects. Consumers’ assessments of the present situation also improved. However, while consumers were more positive about current business conditions than last month, their appraisal of current job availability weakened for the fifth consecutive month.”
The Present Situation Index, measuring consumers’ assessment of current business and labor market conditions, rose 4.8 points to 135.9, along with the Expectations Index, based on consumers’ short-term outlook for income, business and labor market conditions, rising 17.4 points, although remaining below the threshold of 80, signaling a recession ahead.
The increase in consumer confidence in May spanned across all age groups and income groups. Write-in responses to The Conference Board noted that customers are still concerned about tariffs increasing prices and having negative impacts on the economy.
Consumer plans to purchase homes, cars and vacation intentions increased in May, along with increased intentions to purchase services, according to The Conference Board.
