United States: Consumer confidence increases in May, buttressed by strong labor market
May 28, 2019
The Conference Board’s monthly consumer confidence index rose from 129.2 in April to 134.1 in May, exceeding market expectations of 129.9. The index now lies further above the 100-point threshold that separates consumer optimism from pessimism.
Overall, gains in the headline index this month were broad-based, as consumers became more optimistic both towards the present situation and near-term prospects. The strength of the jobs market was notably a key factor for this buoyant optimism. Indeed, the labor differential—the difference between the percentage of respondents who state that jobs are plentiful and those who say that jobs are hard to get—increased from 33.2 in April to 36.3 in May. Consumers were also more upbeat regarding current business conditions in the month.
Similar dynamics were at play regarding consumers’ assessment of the near-term outlook. Their perception of business conditions over the next six months improved, as did their expectations for the labor market in the same period. On the other hand, respondents’ sentiment regarding their own income prospects over the short term was broadly unchanged in May.
Commenting on this month’s reading, Lynn Franco, senior director of economic indicators at The Conference Board, noted:
“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. […] 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.”
United States Private Consumption Forecast
FocusEconomics Consensus Forecast panelists expect private consumption to grow 2.4% in 2019, unchanged from last month’s forecast, and 2.0% in 2020.
Author: Joffrey Simonet, Economist