The Conference Board’s consumer confidence index climbed to 83 in May, in line with expectations.
This was up from a revised reading of 81.7 in April.
Consumer spending accounts for about 40% of the economy and investors watch this to gauge how the economy is holding up.
Here’s the press release:
The Conference Board Consumer Confidence Index®, which had decreased in April, improved moderately in May. The Index now stands at 83.0 (1985=100), up from 81.7 in April. The Present Situation Index increased to 80.4 from 78.5, while the Expectations Index edged up to 84.8 from 83.9 in April.
The monthly Consumer Confidence Survey®, based on a probability-design random sample, is conducted for The Conference Board by Nielsen, a leading global provider of information and analytics around what consumers buy and watch. The cutoff date for the preliminary results was May 14.
Says Lynn Franco, Director of Economic Indicators at The Conference Board: “Consumer confidence improved slightly in May, as consumers assessed current conditions, in particular the labour market, more favourably. Expectations regarding the short-term outlook for the economy, jobs, and personal finances were also more upbeat. In fact, the percentage of consumers expecting their incomes to grow over the next six months is the highest since December 2007 (20.2 per cent). Thus, despite last month’s decline, consumers’ confidence appears to be growing.”
Consumers’ assessment of present-day conditions improved in May. Those stating business conditions are “good” decreased to 21.1 per cent from 22.2 per cent, while those stating business conditions are “bad” declined to 24.1 per cent from 24.8 per cent. Consumers’ assessment of the labour market was more favourable. Those claiming jobs are “plentiful” rose to 14.1 per cent from 13.0 per cent, while those claiming jobs are “hard to get” decreased slightly to 32.3 per cent from 32.8 per cent.
Consumers’ expectations increased slightly in May. The percentage of consumers expecting business conditions to improve over the next six months edged up to 17.5 per cent from 17.2 per cent, while those expecting business conditions to worsen decreased marginally to 10.2 per cent from 10.5 per cent.
Consumers were more positive about the outlook for the labour market. Those anticipating more jobs in the months ahead increased to 15.4 per cent from 14.7 per cent, while those anticipating fewer jobs edged up to 18.3 per cent from 18.0 per cent. The proportion of consumers expecting their incomes to grow increased to 18.3 per cent from 16.8 per cent, but those expecting a drop in their incomes also increased, to 14.5 per cent from 12.9 per cent.
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