Consumer Confidence grows in May
The closely watched Consumer Confidence Index amdinistered by the New York-based Conference Board rose in May to 102.0 (1985=100) from a slight upwardly revised 97.5 in April.
The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, increased to 143.1 (1985=100) in May from 140.6 in April.
Meanwhile, the Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—rose to 74.6 (1985=100) from 68.8 last month. Despite this improvement, for the fourth consecutive month, the Expectations Index was below 80, the threshold which usually signals a recession ahead.
“Confidence improved in May after three consecutive months of decline,” said Dana M. Peterson, chief economist at The Conference Board. “Consumers’ assessment of current business conditions was slightly less positive than last month. However, the strong labor market continued to bolster consumers’ overall assessment of the present situation. Views of current labor market conditions improved in May, as fewer respondents said jobs were ‘hard to get,’ which outweighed a slight decline in the number who said jobs were ‘plentiful.’ Looking ahead, fewer consumers expected deterioration in future business conditions, job availability, and income, resulting in an increase in the Expectation Index. Nonetheless, the overall confidence gauge remained within the relatively narrow range it has been hovering in for more than two years.
“Compared to last month, confidence improved among consumers of all age groups. In terms of income, those making over $100K expressed the largest rise in confidence. On a six-month moving average basis, confidence continued to be highest among the youngest (under 35) and wealthiest (making over $100K) consumers.”
