Americans’ confidence in the economy, as well as their employment and income picture, is rising, brightened by gains in the labor market.
In May, The Conference Board‘s Consumer Confidence Index® jumped to 134.1—an improvement from the month prior, when the Index posted a reading of 129.2. The Expectations reading, which assesses attitudes on business, employment and income prospects in the short-term, rose, as well, to 106.6, and the Present Situation reading, which assesses attitudes on conditions currently, rose to 175.2.
“Consumer confidence posted another gain in May and is now back to levels seen last fall when the Index was hovering near 18-year highs,” said Lynn Franco, senior director of Economic Indicators at The Conference Board, in a statement. “The increase in the Present Situation Index was driven primarily by employment gains.”
In April, the economy generated 263,000 jobs—a surge—and a generational low in unemployment, the Labor Department reported. Earnings, however, stagnated, with confidence lukewarm as a result, according to Franco.
“Expectations regarding the short-term outlook for business conditions and employment improved, but consumers’ sentiment regarding their income prospects was mixed,” Franco said. “Consumers expect the economy to continue growing at a solid pace in the short-term, and despite weak retail sales in April, these high levels of confidence suggest no significant pullback in consumer spending in the months ahead.”