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US Consumer Confidence Index Rose In May After Falling For 3 Straight Months

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Consumer Confidence
DAVID ZALUBOWSKI

(CTN News) – Consumer confidence in the US rose in May following three consecutive months of declines, despite Americans’ worries about interest rates and inflation.

A statement issued on Tuesday morning stated that the Conference Board, a business research organization, saw a rise in consumer confidence from 97.5 in April to 102 in May. Analysts predicted the index would keep declining.

The index measures Americans’ perceptions of the present state of the economy as well as their outlook for the next six months.

This month’s index of Americans’ short-term expectations for income, business, and the labor market is 74.6, up from a depressing 68.8 in April. Compared to the 74.6 from the prior month, this is an improvement. Recessionary times could be ahead in the near future if the number is less than 80.

Consumer Confidence expectations of a recession in the upcoming year are still far from their all-time high in May 2023, even if they rose again in May. More than two thirds of research participants said they thought a recession was “somewhat” or “very” likely to happen in the upcoming year.

Comparing this to findings from a Consumer Confidence Board of Chief Executive Officers study, just about one-third of participants predicted a recession in the next 12 to 18 months.

The board reported that while the percentage of respondents indicating they planned to buy a car increased slightly for the second month in a row, the percentage of respondents indicating they planned to buy a large appliance increased for the first time in a few months.

The proportion of buyers who have expressed a desire to purchase real estate is at its lowest point since August 2012. High mortgage rates combined with rising prices turned off prospective buyers, resulting in a drop in April sales of existing properties.

Consumer Confidence’ assessments of the current situation improved from 140.6 in April to 143.1 in May.

The bulk of economic indicators show that the US economy is doing well based on historical norms; yet, there have been some signs that the economy may be slowing down.

The nation’s economy shrank sharply in the first quarter of 2023, reaching an Consumer Confidence annual pace of 1.6% from the rapid growth rate of 3.4% in the last three months of 2023. This reaction was a result of the bond market’s high interest rates.

Compared to the 0.6% growth in retail sales in March, there was no change in April. This resulted from both the persistence of high pricing and the increased reluctance of consumers to use credit cards for purchases due to high interest rates.

Many large retailers are offering discounts this summer in response to consumers’ growing reluctance to spend money as a result of inflation. The most recent quarterly earnings of major retailers have been made public, and they show that while consumers are still spending, they are become more choosy and price cautious.

In addition, the board’s analysis showed that, even though hiring had decreased the month before, consumers’ confidence in the labor market grew in May.

Although employment is still being created by the labor market, it is not doing so as quickly as it did during the epidemic bounce.

This represents a drop from the 315,000 new Consumer Confidence employment added by businesses in March to the 175,000 new jobs added by businesses in April in the US. While it was the 27th consecutive month that the unemployment rate was below 4%, it did grow to 3.9% during that time. Since the 1960s, this is the longest duration that has happened.

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Alishba Waris is an independent journalist working for CTN News. She brings a wealth of experience and a keen eye for detail to her reporting. With a knack for uncovering the truth, Waris isn't afraid to ask tough questions and hold those in power accountable. Her writing is clear, concise, and cuts through the noise, delivering the facts readers need to stay informed. Waris's dedication to ethical journalism shines through in her hard-hitting yet fair coverage of important issues.

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