In May, US consumer confidence showed a notable recovery. The Conference Board reported that its Consumer Confidence Index rose to 98.0, up from a revised 86.0 in April. This increase reversed the decline seen in the previous month.
The improvement was driven by more positive views on current business conditions and the labor market. The Present Situation Index, which reflects consumers’ opinions on current economic conditions, increased by 4.8 points to 135.9.
More importantly, the Expectations Index, which gauges short-term outlooks on income, economic activity, and employment, jumped 17.4 points to 72.8. Although this remains below the 80-point threshold typically linked to recession fears, it signals a stronger consumer outlook.
Stephanie Guichard, Senior Economist at The Conference Board, explained, “The rebound started before the US-China trade deal on May 12 but gained momentum afterward. The rise was mainly due to improved consumer expectations.
All three parts of the Expectations Index—business conditions, job prospects, and future income—rose from April’s lows. Consumers became less pessimistic about business and jobs over the next six months and more hopeful about their income. While views on current business conditions improved, perceptions of job availability weakened for the fifth month in a row.”
The US Dollar remains strong, trading near the 99.40 level on the US Dollar Index (DXY). This strength persists despite a slight drop in US Treasury yields across the board.
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