Consumer Confidence Dips, May Get a Boost [AUDIO/POLL]
The Consumer Confidence Index for May, released by the Conference Board yesterday, dropped about four points from the month prior. The May figure represented the biggest Index decline since October, proving that Americans are still worried about the health of the U.S. economy. However, a few positive reports in the future could turn things around.
May employment figures are to be released on Friday. If the expected 160,000 jobs have truly been added to the market, consumer sentiment may be reinforced.
"Consumers are holding on to that idea that we're not going to see, in May and June and July, the kind of weak job report that we got in March in April," explained Ken Goldstein, economist with The Conference Board.
Hiring picked up earlier this year, but lost momentum in March and April. Both reports posted new jobs numbers at significantly less than 150,000.
Goldstein added, "What consumers are looking for is better job numbers than that, and for a little bit of a pick-up in wage growth."
He said when considering confidence, the key indicator consumers look at is jobs.
He continued, "The three most important things - jobs #1, income is #2, and everything else is a distant #3."
With a healthy report Friday and another healthy report a month from now, according to Goldstein, the Consumer Confidence Index should start to approach 90.
A reading of 90 indicates a healthy economy. May's figure stands at 64.9. Last October, the Index was 40. In February 2009, it was 25.3.
Goldstein said May's four-point drop could have been worse, considering the back-to-back lousy jobs reports.
"Consumer confidence is, pretty much, holding up," he said.
Consumer spending accounts for 70-percent of all economic activity, which is why the Index is closely monitored.