A monthly measure of consumer confidence has increased on more upbeat assessments of current labor conditions. Consumers remain wary about the months ahead, however.
The Conference Board reported that its Consumer Confidence Index climbed more than a point to 95.4 in May. The gain follows a more than six-point drop in April.
The present situation component of the index jumped three points, while the expectations component edged down two-tenths of a point.
“After a three-month slide, the present situation index increased, propelled by a more positive assessment of the labor market. Expectations, however, were relatively flat following a steep decline in April,” said Lynn Franco, director of economic indicators for the Conference Board. “While current conditions in the second quarter appear to be improving, consumers still remain cautious about the short-term outlook.”
The Conference Board, a business research and membership association, bases the Consumer Confidence Index on the results of monthly surveys of U.S. households. Economists closely monitor the index because consumer spending accounts for more than two-thirds of economic activity in the country.
For May, more optimistic assessments of current business and labor conditions pulled up the present situation component of the index to 108.1.
The proportion of consumers responding to the survey upon which the May index was based who described business conditions as “good” slipped three-tenths of a point to 25.2 percent. But the share of those who characterized business conditions as “bad” declined 1.8 points to 17.4 percent.
The proportion of consumers who described jobs as “plentiful” increased almost two points to 20.7 percent even as the share of those who said jobs remain “hard to get” rose 1.4 points to 27.3 percent.
A slightly less optimistic outlook pulled down the expectations component of the index to 86.9.
The share of consumers who expect business conditions to improve over the next six months edged up two-tenths of a point to 15.6 percent. The proportion of those anticipating worsening conditions increased 1.7 points to 10.8 percent.
The share of consumers who expect more jobs to become available in coming months rose eight-tenths of a point to 14.6 percent. The proportion of those who believe fewer jobs will become available fell nine-tenths of a point to 15.5 percent.
While 17.4 percent of consumers expect higher incomes, unchanged from last month, 11.1 percent expect lower incomes, up three-tenths of a point.