US Consumer Confidence Index Rebounds in May

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 rose 12.3 points in May to 98.0 (1985=100).
• The Present Situation Index—reflecting consumers’ views of current business and labor market conditions—increased 4.8 points to 135.9.
• The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—jumped 17.4 points to 72.8. However, it remains below the 80 threshold that typically signals a recession in the near term.

The cutoff date for preliminary results was May 19, with about half of the responses collected after the May 12 announcement of a pause on certain tariffs on Chinese imports.

May’s rebound in confidence was broad-based across all age groups and all income groups. It was also shared across all political affiliations, with the strongest improvements among Republicans. However, on a six-month moving average basis, confidence in all age and income groups was still down due to previous monthly declines.

In a statement accompanying the report, Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board, said:

“Consumer confidence improved in May after five consecutive months of decline. 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.”