Consumers are getting more upbeat as they see the stock market and the once-downtrodden housing sector steam full speed ahead, as we approach the upcoming summer season.
Specifically, the Conference Board, the New York-based research organization, reported that its Index of Consumer Confidence for May jumped to a reading of 76.2. That was well above the upwardly revised 69.0 result registered in April, which initially had been estimated at 68.1. In February, that survey had come in with a less-upbeat result of 61.9.
As to other components in this survey, the report noted that the Present Situation Index, which is a notoriously less hopeful reading, had increased this month to 66.7 from 61.0 in April. Conversely, the Expectations Index, which tends to be more optimistic, as it is forward looking, jumped from 74.3 to 82.4.
In all, the current overall reading is at a five-year high. Helping the index push forward nicely is a better assessment of current business and of the labor market. According to Lynn Franco, the Director of Economic Indicators at the Conference Board, the back-to-back monthly gains in the composite index suggest that “consumer confidence is on the mend and may be regaining the traction it lost due the fiscal cliff, payroll tax hike, and sequester.''
Moreover, consumers were considerably more optimistic about the short-term outlook. To wit, those expecting business conditions to improve over the next six months rose to 19.2% from 17.2%, while those expecting business conditions to worsen fell from 14.8% to just 12.1%.
Taking the overall report into consideration, there was little not to like here, and as we go forward over the next few months, the better confidence results should help to embolden consumers to lift their spending on an array of offerings. Meanwhile, later this week, the University of Michigan is scheduled to issue its Consumer Sentiment Survey. That report, as well, is expected to show some improvement, albeit a more modest amount.
At the time of this article's writing, the author did not have positions in any of the companies mentioned.