NEW YORK - The consumer confidence index jumped to 63.3 in May from a downwardly revised 57.7 last month, The Conference Board reported this morning.
The April index was originally reported as 57.9.
Economists polled by Thomson Reuters predicted the index would be 59.0.
The present situation index climbed to 30.2 from a downwardly revised 28.2, originally reported as 28.6, while the expectations index increased to 85.3 from an unrevised 77.4 last month.
“Consumer confidence posted its third consecutive monthly gain, and although still weak by historical levels, appears to be gaining some traction,” said Lynn Franco, director of The Conference Board's Consumer Research Center. “Consumers’ apprehension about current business conditions and the job market continues to slowly dissipate. Consumers’ expectations, on the other hand, have increased sharply over the past three months, propelling the expectations index to pre-recession levels (August 2007 89.2). The improvement gas been fueled primarily by growing optimism about business and labor market conditions. Income expectations, however, remain downbeat.”
Business conditions were called “good” by 10.0% of respondents in May, an increase from 8.9% the prior month. Those saying conditions are “bad” fell to 39.3% from 40.0%.
The percentage of consumers expecting a pickup in business conditions in the next half year grew to 23.5% from 19.7%, while 11.5% said they expect conditions to worsen, down from 12.4% the prior month.
On the jobs front, those who believe jobs are “plentiful” dipped to 4.6% in May from 4.7% in April, while the number saying jobs are “hard to get” decreased to 43.6% this survey from 44.8%. The respondents who see more jobs becoming available in a half year, rose to 20.4% from 17.7%. Those expecting fewer jobs to become available dipped to 17.7% from 19.9%, The Conference Board reported.
Income expectations improved, with 11.3% of consumers anticipating an increase in their income in the next six months, up from the prior month's 10.5%, while 16.6% expect their income to decrease, off from 16.7% in the prior month’s survey.
The number of consumers who expected to buy a home in the next six months dropped to 1.9% from 2.1%, while the number of respondents planning to buy a car soared to 6.0% from 5.4%. Fewer consumers than last month said they plan to buy a major appliance in the next six months (26.2% vs. 27.8%).
More respondents than last month (38.3% vs. 36.9%) expect to take a vacation in the next six months, but more said they would stay in the U.S. rather than leave the country. Cars rather than airplanes were the preferred mode of travel, by a 20.7%-17.8% margin.
The consumer confidence survey is based on a representative sample of 5,000 U.S. households for The Conference Board by TNS.
