Consumer Confidence holds steady in May
The closely watched Consumer Confidence Index showed little movement in May, standing at 117.2. That's down marginally from the downwardly revised figure of 117.5 in April.
The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—increased from 131.9 to 144.3. However, the Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell to 99.1 in May, down from 107.9 last month.
“After rebounding sharply in recent months, U.S. consumer confidence was essentially unchanged in May,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “Consumers’ assessment of present-day conditions improved, suggesting economic growth remains robust in Q2. However, consumers’ short-term optimism retreated, prompted by expectations of decelerating growth and softening labor market conditions in the months ahead. Consumers were also less upbeat this month about their income prospects—a reflection, perhaps, of both rising inflation expectations and a waning of further government support until expanded Child Tax Credit payments begin reaching parents in July. Overall, consumers remain optimistic, and confidence should remain resilient in the short term, as vaccination rates climb, COVID-19 cases decline further, and the economy fully reopens.”
Consumers’ appraisal of current conditions improved in May. The percentage of consumers claiming business conditions are “good” fell from 19.4% to 18.7%, but the proportion claiming business conditions are “bad” also declined, from 24.5% to 21.8%. Consumers’ assessment of the labor market improved. The percentage of consumers saying jobs are “plentiful” climbed from 36.3% to 46.8%, while those claiming jobs are “hard to get” declined from 14.7% to 12.2%.