U.S. consumer confidence has bounced back in May after falling in March and April, according to a report today by The Conference Board.
The board’s Consumer Confidence Index has increased to 108.5 points (1985 = 100) from 106.3 last month. Analysts had expected the index to rise to 105 points from the original April estimate of 104 points, according to a survey of 65 economists by Bloomberg News.
“A better job market plus a higher stock market equals a better tone,” said Roger Kubarych, chief U.S. economist at Unicredit HVB, who predicted a reading of 107. “It’s a snapshot of an economy that has improved and is improving.”
The index is based on a monthly survey of 5,000 representative U.S. households, conducted for the board by custom research firm TNS.
“The bounce-back in confidence was due primarily to a more upbeat assessment of present-day business conditions,” said Lynn Franco, director of The Conference Board Consumer Research Center.
“Consumers’ view of the job market – both present and six months from now – was little changed and did not provide a boost in confidence,” she added. “The short-term outlook remains cautious, and rising gasoline prices are having a negative impact on consumers’ inflation expectations. All in all, confidence levels continue to suggest growth, albeit at a slow pace.”
The share of respondents seeing current business conditions as “good” rose to 29.4 percent from April’s 27.5 percent, while the share seeing conditions as “bad” was steady at 14.5 percent. The share of consumers seeing jobs as hard to get dipped to 19.9 percent from April’s 20.3 percent, while the share seeing jobs as plentiful was steady at 29.0 percent.
Going forward, 15.1 percent anticipate business conditions to improve in the next six months, up from 13.8 percent in April; the share of consumers expecting conditions to worsen also rose, from 9.7 percent in April to 10.1 percent in May. The share expecting their own incomes to rise shrank to 17.7 percent from April’s 18.4 percent, while the share expecting their own incomes to decline shrank to 7.8 percent from last month’s 8.6 percent.
The Conference Board is a nonpartisan, nonprofit business membership and research organization with offices in New York City, Chicago and abroad. Additional information is available at www.Conference-Board.org.
