The Conference Board Consumer Confidence Index improved in May after three consecutive months of decline. However, The Conference Board noted the overall confidence gauge remained within the relatively narrow range it has been hovering in for more than two years.
“Consumers’ assessment of current business conditions was slightly less positive than last month, Dana Peterson, chief economist at The Conference Board, said in a press release. “However, the strong labor market continued to bolster consumers’ overall assessment of the present situation. Views of current labor market conditions improved in May, as fewer respondents said jobs were ‘hard to get,’ which outweighed a slight decline in the number who said jobs were ‘plentiful.’
The Consumer Confidence Index rose to a reading of 102.0 this month (1985 = 100) from an upwardly revised reading of 97.5 in April.
Looking ahead, fewer consumers expected deterioration in future business conditions, job availability and income, resulting in an increase in the Expectation Index.
“Compared to last month, confidence improved among consumers of all age groups. In terms of income, those making over $100K expressed the largest rise in confidence,” Peterson said. On a six-month moving average basis, confidence continued to be highest among the youngest consumers (those under age 35) and the wealthiest (those making over $100,000) consumers.
Consumers cited elevated prices, especially for food and groceries, as having the greatest impact on their view of the US economy. Consumers expectations for inflation over the next 12 months ticked up from 5.3% to 5.4% and the share of consumers expecting higher interest rates over the year ahead also rose, to 56.2% from 55.2% .
Consumers’ perceived likelihood of a US recession over the next 12 months rose again in May, with more consumers believing a recession is “somewhat likely” or “very likely.”
Consumers’ outlook on the labor market, on balance, improved in May.
The Conference Board found that 37.5% said jobs were “plentiful” this month, down from 38.4% in April. Just 13.5% of consumers said jobs were “hard to get,” down from 15.5% in April.
In addition, more consumers expect more jobs to be available, rising to 12.6% this month from 12.3% in April. Also, 18.2% anticipate fewer jobs, down from 19.8% last month.