Consumers are feeling more confident about the future, according to the May survey on consumer confidence from The Conference Board.
The board’s monthly consumer confidence index rose 12.3 points in May to 98, up from an 85.7 reading in April. The board’s expectations index, based on consumers’ short-term outlook for income, business and the job market, jumped 17.4 points to 72.8. While that is a major improvement, the May confidence level was still below the 80-point threshold, which typically signals a recession is ahead.
The board’s present situation index, which is based on consumers’ assessment of current business and labor market conditions, also showed an improved outlook, rising 4.8 points to 135.9.
The Conference Board, a business think tank that is known for its market data and research on economic indicators such as consumer confidence, compiled the preliminary monthly survey results up to May 19, with about half the responses being collected after the May 12 announcement of a pause on some import tariffs from China.
Stephanie Guichard, senior economist for global indicators at The Conference Board, said that consumer confidence improved in May after five consecutive months of decline. The rebound was already visible before the U.S.-China trade deal announcement on May 12, but the improvement in attitudes gained momentum afterward.
“The monthly improvement was largely driven by consumer expectations as all three components of the expectations index — business conditions, employment prospects and future income — rose from their April lows,” Guichard said in a statement. “Consumers were less pessimistic about business conditions and job availability over the next six months and regained optimism about future income prospects.”
Guichard said consumers have also improved their assessment of current business conditions. However, while consumers were more positive than last month, their appraisal of current job availability weakened for the fifth consecutive month.
Compared to April, plans to buy big-ticket items, such as homes, cars and major vacations, increased, with some significant gains appearing after May 12. Plans for buying services, appliances and electronics were also up.
The stock market’s rebound from its April swoon played a significant role in improving attitudes. Consumers felt more positive about stock prices, with 44.4% expecting stocks to increase in value during the next 12 months. That sentiment is up from 37.6% in April. Consumers also viewed their family’s current and future financial situation as having improved since April, with the share of consumers expecting a recession in the next 12 months declining.
Write-in comments found that tariffs remain top of mind for consumers, with many still worrying that tariffs will increase prices and slow the economy.
