Consumer confidence showed improvement in May after a decline in April.
The Conference Board reported Tuesday that its index rose to 83.0 from 81.7 the previous month. Bloomberg News said the level was the second-highest since 2008 as people became more optimistic about the economy and the labor market.
“Consumer confidence improved slightly in May as consumers assessed current conditions, in particular the labor market, more favorably,” The Conference Board director of economic indicators Lynn Franco said in a statement.
“Expectations regarding the short-term outlook for the economy, jobs and personal finances were also more upbeat. In fact, the percentage of consumers expecting their incomes to grow over the next six months is the highest since December 2007 (20.2 percent). Thus, despite last month’s decline, consumers’ confidence appears to be growing.”
Bloomberg said higher stock prices and home values are buoying some Americans. Broader employment gains that lead to stronger wage gains would help to further boost sentiment and lift consumer spending, which accounts for almost 70 percent of the economy.
“Rising home prices certainly are making households feel better, and higher net wealth with rising equity portfolios, those things are helping households feel healthier,” Joe LaVorgna, chief U.S. economist at Deutsche Bank Securities in New York, told Bloomberg. He correctly predicted the confidence reading. What’s more, “the labor market is better.”
The Conference Board said consumers’ assessment of current conditions improved in May. Those who said business conditions are “good” decreased to 21.1 percent from 22.2 percent, and those who said business conditions are “bad” declined to 24.1 percent from 24.8 percent.
Their assessment of the labor market was more favorable. Those who said jobs are “plentiful” rose to 14.1 percent from 13.0 percent and those who said jobs are “hard to get” decreased slightly, to 32.3 percent, from 32.8 percent.
Consumers’ expectations increased slightly in May. The percentage who expect business conditions to improve during the next six months edged up to 17.5 percent from 17.2 percent and those who expect business conditions to worsen decreased marginally, to 10.2 percent, from 10.5 percent.