US consumer confidence rebounded slightly in May despite three months of decline, according to the Conference Board.
The New York-headquartered global, nonprofit think tank and business membership organisation said Tuesday that its consumer confidence index rose in May to 102 from 97.5 in April. Analysts were expecting the index to decline again.
The index measures both Americans’ assessment of current economic conditions and their outlook for the next six months, the Associated Press (AP) reported.
The measure of Americans’ short-term expectations for income, business and the job market climbed to 74.6 this month from a dismal 68.8 in April. A reading under 80 can signal a potential recession in the near future.
Consumer expectations of a recession in the next year rose again in May but are still well below their peak in May 2023. More than two-thirds of survey respondents said a recession is “somewhat” or “very” likely in the next 12 months. That’s in contrast to the Conference Board’s survey of CEOs, only about a third of whom foresee a recession in the next 12 to 18 months.
The board said the number of respondents who said they planned to buy a car rose slightly for a second straight month, and those who said they planned to buy a major appliance rose for the first time in several months.
Consumers who planned to purchase a home remained at its lowest level since August 2012. Sales of existing homes slumped in April as high mortgage rates and rising prices discouraged potential buyers.
Consumers’ view of current conditions rose to 143.1 in May from 140.6 in April.
Economic indicators
Most economic indicators show that the US economy is in good shape by historical standards, though there have been signs that it is cooling off.
The nation’s economy slowed sharply in the first quarter to a 1.6% annual pace in the face of high interest rates, down from a brisk 3.4% growth rate in the final three months of 2023.
The board’s survey also showed that consumers’ confidence in the labour market improved in May despite a slowdown in hiring a month earlier.
The labour market continues to churn out jobs, though not at the furious pace during the pandemic rebound. US employers added 175,000 jobs in April, fewer than economists had projected and down from 315,000 in March. Even though the unemployment rate ticked up to 3.9%, it was the 27th straight month joblessness was below 4%, the longest stretch since the 1960s.
