Consumer confidence rose in May after three months of declines

Consumer confidence in the economy rose slightly in May after months of declines, according to data from the Conference Board. Released on Tuesday.

According to the industry group’s monthly survey, the consumer confidence index rose to 102 in May from 97.5 in April.

“Still, overall confidence remained within the relatively narrow range it has been in for more than two years,” Dana Peterson, chief economist at the Conference Board, said in a statement.

Consumer confidence plummeted in 2020 following the COVID-19 pandemic but has mostly recovered in 2021. However, it has fallen again in late 2021 and early 2022 as inflation rose to a 40-year high.

The survey found that consumers’ views of current business and market conditions and near-term prospects for the future rose slightly in May, with the Current Situation Index rising to 143.1 this month from 140.6 last month, and the Expectations Index increasing to 74.6 from 68.8.

The survey found that Americans have a slightly negative view of the current business environment, but an overall positive view of the current labor market.

The percentage of consumers who said the economy was “good” in May fell from 20.8% to 20.3%.

However, last month the number of consumers who said jobs were “plentiful” fell to 37.5%, while the number of consumers who said jobs were “hard to find” fell to 13.5%, slightly outweighing the change in the former.

More consumers expect the economy to improve, jobs to grow and incomes to rise over the next six months, but the Conference Board also noted that the overall expectations index is below 80, which is often an indicator of an impending recession.

The survey also showed that the percentage of consumers who believe an economic recession is likely increased for the second consecutive month.

President Biden has struggled to change the largely negative perception of the state of the economy, a major obstacle as he prepares to face off again against former President Trump in November.

Inflation has improved significantly since hitting a 40-year high of 9.1% in June 2022, falling to 3.4% as of April. But it remains above the Federal Reserve’s target, forcing the central bank to keep interest rates higher for longer.

Even with interest rates at their highest in two decades, the labor market has remained surprisingly resilient, repeatedly beating expectations and keeping the unemployment rate below 4%.