Consumer confidence unexpectedly improved in May.
The Conference Board’s consumer confidence index jumped to 95.4 in May from a 94.3 in April. This was better thna the 95.0 exected by economists. (April’s number was revised down from an earlier estimate of 95.2).
“After a three-month slide, the Present Situation Index increased, propelled by a more positive assessment of the labour market,” the Conference Board’s Lynn Franco said. “Expectations, however, were relatively flat following a steep decline in April. While current conditions in the second quarter appear to be improving, consumers still remain cautious about the short-term outlook.”
Here’s some more colour from the report:
Consumers’ assessment of current-day conditions improved in May. Those saying business conditions are “good” edged down from 25.5 per cent to 25.2 per cent. However, those claiming business conditions are “bad” also decreased from 19.2 per cent to 17.4 per cent. Consumers were mixed in their assessment of the job market. Those stating jobs are “plentiful” increased from 19.0 per cent to 20.7 per cent, while those claiming jobs are “hard to get” rose from 25.9 per cent to 27.3 per cent.
Consumers’ optimism about the short-term outlook edged down in May. The percentage of consumers expecting business conditions to improve over the next six months inched up from 15.4 per cent to 15.6 per cent, while those expecting business conditions to worsen also increased, from 9.1 per cent to 10.8 per cent. Consumers’ outlook for the labour market, however, improved. Those anticipating more jobs in the months ahead increased from 13.8 per cent to 14.6 per cent, while those anticipating fewer jobs declined from 16.4 per cent to 15.5 per cent. The proportion of consumers expecting growth in their incomes was unchanged at 17.4 per cent, while the proportion expecting a decline increased slightly from 10.8 per cent to 11.1 per cent.
“Overall, most confidence indicators have fallen back over the past few months, but remain at levels that historically have been consistent with stronger real consumption growth than we have actually seen in recent months,” Capital Economics’ Paul Ashworth said.