The Conference Board’s Consumer Confidence Index® one-month increase to 98.0 is the first gain following five months of sharp declines, pointing toward brighter economic outlooks for the upcoming summer months.
Consumer confidence has regained some footing after five straight months of decline.
The Conference Board Consumer Confidence Index® hit 98.0 in May, up 12.3 points from April and its second monthly gain in a row. The surge was across all age groups and all income groups, and was shared across all political affiliations, with the strongest improvements among Republicans.
Still, on a six-month moving average basis, confidence in all age and income groups was still down due to previous monthly declines.
The Index is based on consumers’ assessments of current business and labor market conditions as well as their short-term outlook for income, business and labor market conditions.
“Our survey results show that consumers are feeling more optimistic about the US economy heading into summer,” said Stephanie Guichard, Senior Economist, Global Indicators at The Conference.
When asked what major topics are influencing their views of the economy, more than a third (36.7%) said they’ve put money aside for future spending. Around a quarter of consumers (26.6%) dug into their savings to pay for goods and services while 26% postponed major purchases.
Still, they indicated greater concern about affordability than job security, with nearly half concerned about not being able to buy the things to need or want and less than a quarter worried about losing their jobs.
Additionally, with the stock market continuing to recover in May, consumers’ outlook on stock prices improved, with 44% expecting stock prices to increase over the next 12 months (up from 37.6% in April) and 37.7% expecting stock prices to decline (down from 47.2% in April).
The May survey also paints a more positive picture for Americans’ evaluation of their current and future financial situations. The share of consumers expecting a recession over the next 12 months declined.
With supply chains showing signs of loosening and inflation easing, consumers’ expectations for interest rates ahead were little changed, while their average 12-month inflation expectations decreased to 6.5% after spiking at 7% in April.
Consumers also increased planned purchases for homes, cars and vacations. Additionally, plans to buy appliances and electronics were also up.
The monthly Consumer Confidence Survey®, based on an online sample, is conducted for The Conference Board by Toluna, a technology company that delivers real-time consumer insights and market research through its innovative technology, expertise, and panel of over 36 million consumers. The cutoff date for the preliminary results was May 19.