US Consumer Confidence Index Moves Higher in May, Ending Streak of Three Consecutive Declines

On Tuesday, the Conference Board, a non-partisan, not-for-profit think tank founded in 1916, released the results of its Consumer Confidence Survey® for May.

• The Consumer Confidence Index® increased to a reading of 102.0 (1985=100) in May, up from an upwardly revised April reading of 97.5. The increase ends three consecutive months of declines.
• The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—increased to a reading of 143.1 (1985=100) in May, up from 140.6 in April.
• The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—rose to a reading of 74.6 (1985=100) in May, up from 68.8 in April. The Conference Board notes that despite the improvement in the Expectations Index for the fourth consecutive month, the index remains below 80, the threshold which usually signals a recession ahead.

Adding background and analysis to the report, Conference Board Chief Economist Dana Peterson said:

“Confidence improved in May after three consecutive months of decline. 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.”