US Consumer Confidence Jumps Sharply In May After 5 Consecutive Months Of Decline

The U.S. Consumer Confidence Index rose 12.3 points in May to 98, marking a significant jump from its near five-year low as consumers reflected less pessimism about business conditions and the labor market over the next six months.

The surge in May follows five consecutive months of decline. Notably, the rebound was broad-based across all age groups and all income groups.

The short-term outlook for income, business, and labor market conditions, reflected by the Expectations Index, rose 17.4 points to 72.8, but remained under the threshold of 80, typically indicating a recession ahead.

The Conference Board indicated that about half of the responses were collected after May 12, when the pause on some tariffs on imports from China was announced.

Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board, said that consumer expectations largely drove the monthly improvement as all three components of the Expectations Index, business conditions, employment prospects, and future income, rose from their April lows.

“Consumers’ assessments of the present situation also improved. However, while consumers were more positive about current business conditions than last month, their appraisal of current job availability weakened for the fifth consecutive month,” she said.

Meanwhile, consumers’ outlook on stock prices improved as well. Forty-four percent expect stock prices to increase over the next 12 months, compared to 37.6% in April, and 37.7% expect stock prices to decline, down from 47.2% in April.

“This was one of the survey questions with the strongest improvement after the May 12 trade deal,” Guichard said.

Meanwhile, U.S. markets rallied on Tuesday after President Donald Trump announced a pause on EU tariffs till July.

The SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500, traded 1.63% higher, while the Invesco QQQ Trust, Series 1 (QQQ), which tracks the Nasdaq Composite, was up 1.96%.

Also See: Tesla Hits A Speed Bump In Europe With Sales Plummeting 49% As CEO Elon Musk’s Politics, Rising Competition Hurt EV Giant

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