US Consumer Confidence: Slightly weaker

US consumer confidence (Conference Board; May) was lower than expected (forecast was 128.2; previous month was 128.7, but now revised downwards to 125.6).

To this end, the Conference Board, which collects the data, writes:

“Consumer confidence increased in May after a modest decline in April,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions increased to a 17-year high (March 2001, 167.5), suggesting that the level of economic growth in Q2 is likely to have improved from Q1. Consumers’ short-term expectations improved modestly, suggesting that the pace of growth over the coming months is not likely to gain any significant momentum. Overall, confidence levels remain at historically strong levels and should continue to support solid consumer spending in the near-term.”

Consumers’ assessment of current conditions improved in May. Those claiming business conditions are “good” increased from 34.8 percent to 38.4 percent, while those claiming business conditions are “bad” decreased from 12.3 percent to 12.0 percent. Consumers’ assessment of the labor market was somewhat mixed. The percentage of consumers stating jobs are “plentiful” improved from 38.2 percent to 42.4 percent, while those claiming jobs are “hard to get” also increased, from 15.5 percent to 15.8 percent.

Consumers were modestly more positive about the short-term outlook in May. The percentage of consumers anticipating business conditions will improve over the next six months decreased from 23.6 percent to 23.1 percent, while those expecting business conditions will worsen also decreased, from 9.8 percent to 8.3 percent.

Consumers’ outlook for the labor market was mixed. The proportion expecting more jobs in the months ahead increased from 18.6 percent to 19.7 percent, while those anticipating fewer jobs also increased, from 13.2 percent to 13.9 percent. Regarding their short-term income prospects, the percentage of consumers expecting an improvement declined, from 21.8 percent to 21.3 percent, while the proportion expecting a decrease rose from 7.9 percent to 8.2 percent.“

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