The US consumer confidence index increased to 102.0 in May from 97.5 in April, as reported by The Conference Board. Both the Present Situation Index and the expectations Index also rose, indicating higher consumer confidence in current and future economic conditions. However, despite the improvement, the expectations index remained below 80 for the fourth consecutive month, suggesting a potential recession in the near future.
Consumers’ views on current business conditions were slightly less positive in May, with 20.3% describing conditions as ‘good’ and 17.6% as ‘bad.’ In terms of the labor market, the percentage of consumers feeling jobs were ‘plentiful’ dropped to 37.5% while those who felt jobs were ‘hard to get’ decreased to 13.5%. Overall, consumers’ perceptions of business conditions and the labor market showed some improvement in May.
In May, consumer sentiment towards short-term business conditions showed a slight improvement compared to April. 13.3% of consumers expected business conditions to improve, slightly lower than April’s 13.4%. Additionally, the outlook for the labour market improved, with more consumers anticipating job availability to increase, and fewer expecting job losses. This suggests a somewhat more optimistic view among consumers regarding the economy.
In May, consumers’ short-term income prospects improved, with more expecting an increase in income and fewer expecting a decrease. However, the perceived likelihood of a US recession over the next 12 months increased for the second month in a row. Despite this, overall confidence improved, according to chief economist Dana M. Peterson. Consumers’ assessment of current business conditions was slightly less positive, but the strong labor market contributed to a positive overall present situation assessment.
