Consumer Confidence Soars to its Highest Level in 6 Years

The Conference Board [CB], a New York-based industry group focused on economic analysis, said on Tuesday its Consumer Confidence Index™, which had improved considerably last month, posted another significant gain in May. The index now stands at 54.9 from a revised 40.8 in April, the biggest one-month jump since April FY2003. Economists had estimated for a much smaller rise to 42.

The CB’s survey, which is based on a representative sample of 5,000 U.S. households, found that those claiming jobs are “hard to get” decreased to 44.7% from 46.6% in April. Those saying jobs are “plentiful” edged up to 5.7% from 4.9%. Those expecting business conditions will improve over the next six months increased to 23.1% from 15.7%, while those anticipating conditions will worsen declined to 17.8% compared to April’s 24.4%. Clearly, consumers’ short-term outlook improved in May.

From CB: “Consumers are considerably less pessimistic than they were earlier this year,” said Lynn Franco, “and expectations are that business conditions, the labor market and incomes will improve in the coming months. While confidence is still weak by historical standards, as far as consumers are concerned, the worst is now behind us,” director of The Conference Board’s Consumer Research Center.

The CB report suggest that, while the economy continues to contract in the current quarter, the pace of deterioration has abated somewhat.

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