Consumer confidence stabilized in May, following a sharp decline in April, according to The Conference Board Consumer Confidence Index. The index rose to a reading of 86.6 this month from a reading of 85.7 in April. The Expectations Index – based on consumers’ short-term outlook for income, business and labor market conditions – also improved from 94.3 in April to 96.9 this month.
“Following two months of rapid decline, the free-fall in confidence stopped in May,” said Lynn Franco, senior director of economic indicators at The Conference Board.
“Short-term expectations moderately increased as the gradual re-opening of the economy helped improve consumers’ spirits,” Franco said. “However, consumers remain concerned about their financial prospects. In addition, inflation expectations continue to climb, which could lead to a sense of diminished purchasing power and curtail spending.”
Consumers’ assessment of current conditions declined further this month. The percent of consumers saying business conditions are “good” fell to 16.3% this month from 19.9% in April. In addition, a greater percentage of consumers said business conditions in April are “bad” at 52.1%, an increase from 45.3% in April.
Consumers’ appraisal of the job market was mixed this month. The percentage of consumers saying jobs are “plentiful” decreased to 17.4% from 18.8% April. But at the same time, fewer consumers said jobs were “hard to get” at 27.8% this month compared to 34.5% in April.
Looking ahead, however, consumers were moderately more optimistic. The Conference Board found that 43.3% of consumers expect business conditions to improve over the next six months, up from 39.8% in April. In addition, 21.4% of consumers this month expected business conditions to worsen over the next six months, down from 25.1% in April.