U.S. consumer confidence increased in May, bouncing back from a four-month low but failing to erase reservations about the U.S. economy’s short-term outlook. The index from the Conference Board registered 95.4 this month, a jump from 94.3 in April but still well below the year’s high-water mark of 103.8 in January.
Increasing home values, a robust stock market and bumps in planned purchases of major items all contributed to growth in consumer confidence. The report found that Americans intending to buy a new house increased to 1.4% this month, the highest figure since November. Also, the Commerce Department revealed on Tuesday that new property purchases increased 6.8% in April.
In addition, the consumer confidence index was “propelled by a more positive assessment of the labor market,” said Lynn Franco, director of economic indicators at The Conference Board. “Expectations, however, were relatively flat following a steep decline in April.” Nearly 225,000 jobs were added last month (compared to 85,000 in March), and the unemployment rate stands at 5.4%, the lowest it has been since May of 2008. Added Franco: “While current conditions in the second quarter appear to be improving, consumers still remain cautious about the short-term outlook.”
That caution showed in several mixed indicators from the survey. Regarding the job market, those stating jobs are “plentiful” increased from 19% to 20.7%, but those claiming jobs are “hard to get” also rose from 25.9% to 27.3%. When asked how business conditions would fare over the next six months, those who expected improvement increased from 15.4% to 15.6%, while those who expected conditions to worsen also increased from 9.1% to 10.8%.