Consumers Feel Better About Jobs, Expect Higher Wages
Despite retreating from six-year highs in April, consumer confidence rebounded this month as Americans were more optimistic about the future. In fact, about one in five Americans expected their incomes to rise over the next six months.
The Conference Board’s Consumer Confidence Index increased 1.3 percentage points to 83.0 in May, an improvement from the downwardly revised 81.7 in April. That is the second highest reading since January 2008. The results were inline with expectations. The lowest point for the index last year was 58 in January, while the highest point was reached in June at 82.1. During the Great Recession, the index averaged a dismal 54.
“Consumer confidence improved slightly in May, as consumers assessed current conditions, in particular the labor market, more favorably,” said Lynn Franco, director of Economic Indicators at the Conference Board, in a press release. “Expectations regarding the short-term outlook for the economy, jobs, and personal finances were also more upbeat. In fact, the percentage of consumers expecting their incomes to grow over the next six months is the highest since December 2007 (20.2 percent.) Thus, despite last month’s decline, consumers’ confidence appears to be growing.”
In May, the Present Situation Index increased to 80.4 from 78.5, while the Expectations Index climbed higher to 84.8 from 83.9 in April. The assessment of people claiming business conditions are “good” declined to 21.1 percent from 22.2 percent. The number of people saying business conditions are “bad” also decreased to 24.1 percent from 24.8 percent.
The percentage of consumers expecting business conditions to improve over the next six months increased to 17.5 percent, while those anticipating business conditions to worsen decreased slightly to 10.2 percent from 10.5 percent. Those stating jobs are “plentiful” improved to 14.1 percent from 13 percent, while those saying jobs are “hard to get” fell to 32.3 percent from 32.8 percent. Those expecting more jobs in the months ahead increased to 15.4 percent from 14.7 percent.
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