Consumer Confidence Up Again in May26 May, 2009 By: Erik Gruenwedel
Consumer confidence in retail spending surged in May — the second significant monthly rise since March and the highest level recorded in eight months — according to the Conference Board Consumer Confidence Index.
The Index now stands at 54.9 (1985 represents the peak, at 100), up from 40.8 in April. The Present Situation Index increased to 28.9 from 25.5 last month. The Expectations Index rose to 72.3 from 51.0 in April.
The index is based on a representative sample of 5,000 U.S. households. The cutoff date for May’s preliminary results was May 19.
“Consumers are considerably less pessimistic than they were earlier this year, and expectations are that business conditions, the labor market and incomes will improve in the coming months,” said Lynn Franco, director of The Conference Board Consumer Research Center. “While confidence is still weak by historical standards, as far as consumers are concerned, the worst is now behind us.”
Indeed, respondents claiming business conditions are “good” increased to 8.7% from 7.9%. However, those claiming conditions are “bad” increased to 45.3% from 44.9%.
Consumers’ appraisal of the job market also was more favorable. Those claiming jobs are “hard to get” decreased to 44.7% from 46.6% in April. Respondents 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% from 24.4% in April.
The employment outlook also was less pessimistic. The percentage of consumers expecting more jobs in the months ahead increased to 20% from 14.2%, while those anticipating fewer jobs decreased to 25.2% from 32.5%. The proportion of consumers anticipating an increase in their incomes edged up to 10.2% from 8.3%.