Despite trade tensions with China in the past few weeks, consumer confidence is relatively high, according to the Conference Board. In fact, the numbers are near an 18-year high after posting gains in both April and May.
The Conference Board Consumer Confidence Index improved in May, following an increase in April. The Index now stands at 134.1, up from 129.2 in April.
The Present Situation Index, which is based on consumers’ assessment of current business and labor market conditions, increased from 169.0 to 175.2. And the Expectations Index, based on consumers’ short-term outlook for income, business and labor market conditions, increased from 102.7 last month to 106.6 this month.
According to the survey, those stating business conditions are “good” increased from 37.6% to 38.3%, while those saying business conditions are “bad” decreased from 11.3% to 10.2%. Consumers’ assessment of the labor market was also more positive. The percentage of consumers stating jobs are “plentiful” increased from 46.5% to 47.2%, while those claiming jobs are “hard to get” declined from 13.3% to 10.9%.
Lynn Franco, senior director of Economic Indicators at The Conference Board, commented:
Consumer Confidence posted another gain in May and is now back to levels seen last fall when the Index was hovering near 18-year highs. The increase in the Present Situation Index was driven primarily by employment gains. Expectations regarding the short-term outlook for business conditions and employment improved, but consumers’ sentiment regarding their income prospects was mixed. Consumers expect the economy to continue growing at a solid pace in the short-term, and despite weak retail sales in April, these high levels of confidence suggest no significant pullback in consumer spending in the months ahead.