Consumer confidence hit a six month high in May as high levels of employment kept shoppers in a positive mood, according to The Conference Board.
The Consumer Confidence Index for the year’s fifth month is 134.1, up from 129.2 in April. The Present Situation Index— based on consumers’ assessment of current business and labor market conditions— increased from 169 to 175.2. The Expectations Index, which takes into account consumers’ short-term outlook for income, business and labor market conditions, increased 3.9 points to 106.6.
“Consumer confidence posted another gain in May and is now back to levels seen this past fall when the Index was hovering near 18-year highs,” said Lynn Franco, senior director of economic indicators at The Conference Board. “The increase in the Present Situation Index was driven primarily by employment gains. Consumers expect the economy to continue growing at a solid pace in the short-term, and despite weak retail sales in April, these high levels of confidence suggest no significant pullback in consumer spending in the months ahead.”
Consumers’ assessment of present-day conditions improved further in May. Those stating business conditions are “good” increased from 37.6% to 38.3%, while those saying business conditions are “bad” decreased from 11.3% to 10.2%. Consumers’ assessment of the labor market was also more positive. The percentage of consumers stating jobs are “plentiful” increased from 46.5% to 47.2%, while those claiming jobs are “hard to get” declined from 13.3% to 10.9%.