US consumer confidence rebounds in May on tariff optimism
Make us a preferred source
Make us a preferred source on Google
The news: US consumer confidence jumped in May, improving on five months of deterioration as the economy and labour market outlook lifted.
The numbers: The US Conference Board’s consumer confidence index increased 12.3 points in May to 98.0, up from 85.7 in April. Reuters economists had forecast the index to creep up to 87.0.
Compared to April, purchasing plans for homes and cars and holiday intentions increased notably, with some significant gains after 12 May. Plans for households to buy big-ticket items, including appliances and electronics, were also up.
The Conference Board’s ‘Expectations Index,’ based on consumers’ short-term outlook for income, business, and labour market conditions, surged 17.4 points to 72.8 in May, but remained below the threshold of 80 which tends to signal a recession in the future. The share of consumers expecting a recession over the next 12 months declined.
The context: The Conference Board said that around half of the responses were collected after the 12 May announcement of a pause on some of the Trump administration’s tariffs on goods imported from China.
Improvement in the gauge could indicate that concerns about the impact of trade tariffs may have eased in the past few week, however, Trump has since made renewed efforts to increase levies on countries or extend deadlines on tariff decisions.
Stephanie Guichard, senior economist, at the Conference Board said “The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards…Consumers were less pessimistic about business conditions and job availability over the next six months and regained optimism about future income prospects.”
Guichard added that while consumers were more positive about current business conditions than last month, their assessment of current job availability weakened for the fifth consecutive month.
The sources: US Conference Board, Reuters, Bloomberg
