Contact Us
Make My Homepage

Consumer Confidence Moved Up in May

U.S. consumers were slightly more confident in the economy in May than in April, partly because of strengthening optimism about future hiring and income gains.

Retail Sales Slow As Consumer Confidence Index Drops
Scott Olson, Getty Images

The Conference Board said Tuesday that its confidence index rose to 83 from a revised 81.7 in April. That’s the second-highest reading since January 2008, just after the Great Recession began. Only March was higher at 83.9.

The increase is “enough to suggest decent, but not spectacular, gains in consumers’ spending,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics, in a note to clients.

Confidence has climbed steadily since it bottomed out at 25.3 in February 2009. It sits significantly above last year’s average of 72.3. But it still isn’t back to healthy levels. The figure regularly topped 90 before the recession.

A rising stock market helped boost confidence in May, economists said. Gains, however, were likely limited by higher gas prices pushing in the opposite direction.

Overall, Americans are much more bullish about the job market, the Conference Board’s survey showed. That’s a good sign that hiring may have been healthy this month. The government will report May’s jobs figures on June 6.

The number of Americans who consider jobs easier to find rose to a six-year high. And 15.4 percent of consumers expect hiring to pick up in the next six months, up from 14.7 percent in April.

The survey also showed that nearly one-fifth of Americans expect their incomes to grow over the next six months, the highest level since December 2007. More Americans said they planned to buy a car in the next six months, though the percentage saying they planned to buy a house fell to the lowest level in 15 months.

Consumer sentiment is a closely watched figure, as consumer spending accounts for 70 percent of the nation’s economic activity.

A recent burst of hiring likely has boosted confidence.

Employers added 288,000 jobs in April, the most in 2 1/2 years. The national unemployment rate fell to 6.3 percent in April from 6.7 percent.

The job gains should provide much-needed support for the economy. More Americans earning paychecks means more spending to help boost growth.

The economy expanded at a scant 0.1 percent annual rate in the first quarter. Data released since then indicate that the economy probably contracted by as much as 0.8 percent from January through March. That is a sharp reversal from an annual pace of 3.2 percent in the second half of last year.

Economists have blamed cold weather and snowstorms for most of the slowdown. The harsh winter weather kept shoppers away from the malls and car dealer lots, while also shutting down some factories and disrupting shipping.

Growth is expected to bounce back in the current April-June quarter, perhaps to an annual pace as high as 3.5 percent. Home construction, car sales and retail sales have all recovered as the weather has improved.

 

(Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

 

 

Leave a Comment

It appears that you already have an account created within our VIP network of sites on . To keep your points and personal information safe, we need to verify that it's really you. To activate your account, please confirm your password. When you have confirmed your password, you will be able to log in through Facebook on both sites.

Forgot your password?

*Please note that your points, prizes and activities will not be shared between programs within our VIP network.

It appears that you already have an account on this site associated with . To connect your existing account with your Facebook account, just click on the account activation button below. You will maintain your existing profile and VIP program points. After you do this, you will be able to always log in to http://nj1015.com using your Facebook account.

*Please note that your points, prizes and activities will not be shared between programs within our VIP network.

Please fill out the information below to help us provide you a better experience.

Register on New Jersey 101.5 quickly by logging in with your Facebook account. It's just as secure, and no password to remember!

Not a Member? Sign Up Here

Register on New Jersey 101.5 quickly by logging in with your Facebook account. It's just as secure, and no password to remember!