Consumer Confidence Index Continues Rise [AUDIO]
Consumer confidence took a big jump this month, and while this measure of economic optimism has been up and down recently, this time it is different.
The Consumer Confidence Index is over 76 right now, rising in May to 76.2. That's up from a reading of 69.0 in April and the highest since February 2008.
Ken Goldstein, of the Conference Board, says that's not only the highest it's been in five years, but for the first time in a long time, the confidence measure has climbed for two months in a row.
"People are not only hearing from the news about the number of new jobs coming out, but they know somebody who got one. Or at least got a job offer. And so that puts consumer expectations in a little better frame of mind."
The job market has improved steadily over the past six months. The economy has added an average of 208,000 jobs a month since November. That's well above the monthly average of 138,000 during the previous six months.
Consumers' confidence in the economy is watched closely because their spending accounts for about 70 percent of economic activity. Conference Board economist Lynn Franco said Americans are more optimistic after worrying earlier in the year about higher taxes and federal spending cuts.
Goldstein says the real proof will come when we get around to the back-to-school and holiday retailing seasons. If that consumer confidence is real, people will spend for real.