Consumer confidence rebounded in May, ending a five-month streak of declines, according to new data from The Conference Board.
The Consumer Confidence Index jumped 12.3 points to 98.0, rising from April’s 85.7 reading, and coming in above the consensus forecast of 87.1.
Meanwhile, the Expectations Index, which measures consumers’ short-term outlook, climbed 17.4 points to 72.8, while the Present Situation Index rose 4.8 points to 135.9.
“Consumer confidence improved in May after five consecutive months of decline,” said Stephanie Guichard, Senior Economist at The Conference Board. “The rebound was already visible before the May 12 U.S.-China trade deal but gained momentum afterwards.”
Expectations for business conditions, jobs, and income all improved, with the share of consumers expecting their income to rise increasing to 18%, up from 15.9% in April. The share expecting more jobs rose to 19.2%, from 13.9%.
The Conference Board said purchasing plans also rebounded, with more consumers intending to buy homes, cars, appliances, and services.
Optimism about stock prices increased, with 44% expecting gains in the next year, up from 37.6% in April.
While inflation and affordability remained concerns, average 12-month inflation expectations eased to 6.5%. 19% reported advancing purchases ahead of tariffs, though that number was higher among wealthier households.
“May’s rebound in confidence was broad-based across all age groups and all income groups,” said the Conference Board. “It was also shared across all political affiliations, with the strongest improvements among Republicans.”
However, it was noted that on a six-month moving average basis, confidence remains down.
Despite lingering anxieties over affordability, Guichard said that “the monthly improvement was largely driven by consumer expectations” and the overall rebound was broad-based.
Source : Investing