Consumer confidence surged to a three-month high in May as optimism about the future economy rebounded sharply, according to the latest report from the Conference Board.
- The Consumer Confidence Index jumped to 98 in May, up 12.3 points from April, reaching its highest level since February.
- Economists had anticipated a fourth consecutive monthly decline to an index level of just 84.
Breaking It Down: Driving this unexpected rise was a significant boost in consumer expectations. The Expectations Index, which measures attitudes toward short-term prospects for income, business, and labor market conditions, soared 17.4 points to 72.8.
- Despite this strong improvement, the index remains below 80, a critical threshold that typically signals recessionary risk ahead.
- Meanwhile, consumers’ views of current economic conditions also improved, though more modestly. The Present Situation Index, reflecting consumers’ assessment of existing business and labor market environments, rose 4.8 points to 135.9.
Across The Board: May’s boost in consumer confidence was widespread, extending across all age groups, income levels, and political affiliations, although Republicans demonstrated the sharpest increase in optimism.
What They’re Saying: Stephanie Guichard, Senior Economist for Global Indicators at The Conference Board, highlighted the significance of this improvement: “The rebound was already visible before the May 12 U.S.-China trade deal but gained momentum afterwards.” However, she cautioned that while optimism about current business conditions improved, consumer perceptions of job availability continued weakening for the fifth consecutive month.
Impact on Rates: While confidence did rise, future outlook remains depressed, so it is unlikely to have much of an impact on rates.