U.S. consumer confidence hits five-year high

05/28/2013

U.S. consumer confidence hits five-year high

U.S. consumer confidence hits five-year high

NEW YORK – May 28, 2013 – The Consumer Confidence Index is arguably the most important economic statistic released each month that most people ignore.

A positive index number means Americans are feeling secure in the economy and their ability to spend – and their spending feeds an increased rebound as they buy homes, furniture, cars and more. Upbeat attitudes are a precursor to other positive indicators, such as a rising home demand and selling prices.

The Conference Board Consumer Confidence Index, which had improved in April, increased again in May. The Index now stands at 76.2 (1985=100), up from 69.0 in April. The Present Situation Index increased to 66.7 from 61.0. The Expectations Index, which gauges attitudes about the future six months from now, improved to 82.4 from 74.3.

“Consumer confidence posted another gain this month and is now at a five-year high,” says Lynn Franco, director of economic indicators at The Conference Board. “Consumers’ assessment of current business and labor market conditions was more positive, and they were considerably more upbeat about future economic and job prospects. Back-to-back monthly gains suggest that consumer confidence is on the mend and may be regaining the traction it lost due to the fiscal cliff, payroll-tax hike and sequester.”

May’s present-day conditions
Consumers saying business conditions are “good” increased to 18.8 percent from 17.5 percent, while those stating business conditions are “bad” decreased to 26.0 percent from 27.6 percent.

Consumers’ assessment of the labor market was also more positive. Those claiming jobs are “plentiful” increased to 10.8 percent from 9.7 percent, while those claiming jobs are “hard to get” edged down to 36.1 percent from 36.9 percent.

Future expectations
Consumers were considerably more optimistic about the short-term outlook. Those expecting business conditions to improve over the next six months increased to 19.2 percent from 17.2 percent, while those expecting business conditions to worsen decreased to 12.1 percent from 14.8 percent.

Consumers’ outlook for the labor market was also more upbeat. Those expecting more jobs in the months ahead improved to 16.8 percent from 14.3 percent, while those expecting fewer jobs decreased to 19.7 percent from 21.8 percent. The proportion of consumers expecting their incomes to increase dipped slightly to 16.6 percent from 16.8 percent, while those expecting a decrease edged down to 15.3 percent from 15.9 percent.

Nielsen, a global provider of information and analytics around what consumers buy and watch, conducts the monthly Consumer Confidence Survey based on a probability-design random sample. The cutoff date for the preliminary results was May 15.

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