NEW YORK – U.S. consumer confidence soared in May to its highest level in eight months as severe strains in the labour market showed some signs of easing, though Americans’ moods remained depressed by historical standards.
The Conference Board, an industry group, said on Tuesday its index of consumer attitudes jumped to 54.9 in May from a revised 40.8 in April, the biggest one-month jump since April 2003. Economists had been looking for a much smaller rise to 42.0.
Fewer Americans said jobs were “hard to get,” the survey found, with that measure slipping to 44.7 per cent from 46.6 per cent. Those saying jobs were plentiful climbed to a still meager 5.7 per cent, but that was still higher than April’s 4.9 per cent.
“Consumers are considerably less pessimistic than they were earlier this year,” said Lynn Franco, director of The Conference Board’s Consumer Research centre.
The data was in line with other evidence suggesting that, while the economy continues to contract in the current quarter, the pace of deterioration has abated somewhat.
U.S. stocks extended their rally after the data, with the Dow Jones industrial average up 120 points or 1.5 per cent.
The survey offered mixed messages regarding Americans’ propensity to spend money. The proportion of those who said they planned on buying a car over the next six months rose to 5.5 per cent, its highest in at least a year.
But fewer intended to buy homes — only 2.3 per cent, a tough break for one of the hardest hit sectors in the country’s economic crisis. A separate report on Tuesday revealed U.S. home prices dropped 18.7 per cent in March compared to a year earlier.