"Consumer confidence is on the mend and may be regaining the traction it lost due to the fiscal cliff, payroll-tax hike, and sequester."
Positive assessment of current economic conditions and perceived improvement in the job market boosted the monthly Consumer Confidence Survey to a five-year high in May.
The Consumer Confidence Index, which gauges consumer attitudes toward the economy, increased from 69 in April to 76.2, the highest reading since February 2008, the Conference Board, a research firm, reported Tuesday. This the second consecutive monthly gain in consumer confidence following a drop in the Index in March.
“Consumers’ assessment of current business and labor-market conditions was more positive and they were considerably more upbeat about future economic and job prospects,” Lynn Franco, Director of Economic Indicators at the Conference Board, said in a statement. “Back-to-back monthly gains suggest that consumer confidence is on the mend and may be regaining the traction it lost due to the fiscal cliff, payroll-tax hike, and sequester.”
Consumers who believe that current business conditions are “good” increased from 17.5 percent to 18.8 percent, whole those who said they are “bad” decreased from 27.6 percent to 26 percent. Those claiming jobs are “plentiful” increased from 9.7 percent to 10.8 percent, while those claiming they are “hard to get” edged down from 36.9 percent to 36.1 percent.
The short-term outlook was even more positive, the Conference Board reported. Those expecting business conditions to improve over the next six months increased from 17.2 percent to 19.2 percent. Conversely, those expecting business conditions to worsen decreased from 14.8 percent to 12.1 percent. Those expecting more jobs improved from 14.3 percent to 16.8 percent, while those expecting fewer jobs decreased from 21.8 percent to 19.7 percent.
The proportion of consumers expecting their incomes to increase dipped slightly from 16.8 percent to 16.6 percent, while those expecting a decrease edged down to 15.3 percent from 15.9 percent.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.