Consumers have brighter expectations for jobs in coming months, but their overall confidence remains relatively low, the Conference Board reported Tuesday.
A reading on U.S. consumer confidence jumped to 54.9 in May from an upwardly revised 40.8 in April as expectations for jobs improved, according to the Conference Board. The gain is the fourth-largest in the 32-year history of the survey, and the index is at its highest level in eight months. Economists were expecting the index to hit 43.
"Expectations are that business conditions, the labor market and incomes will improve in the coming months," said Lynn Franco, director of the Conference Board's Consumer Research Center. "While confidence is still weak by historical standards, as far as consumers are concerned, the worst is now behind us."
Still, confidence has "a long way to go" before hitting "normal" levels, wrote Ellen Beeson Zentner, senior U.S. macroeconomist with the Bank of Tokyo-Mitsubishi UFJ, in a research note. During recessions, confidence has averaged 76.3, rising to 85.9 during recoveries, and 99.8 during expansions, according to the research note.
The surge in May followed a substantial increase in April. An improved economy is almost a "default" occurrence, given how tough times have been, wrote Dan Greenhaus with the equity strategy group at Miller Tabak, in a research note.
"Of course, whether better days materialize or not remains to be seen," Greenhaus wrote.
The increase in confidence could lead to more spending, wrote economist Stephen Gallagher of Societe Generale in a research note.
"Consumer spending has been mixed. After a strong January, retail spending by consumers has been flat to down," Gallagher wrote. "The confidence gains offset some of the mixed news and suggest we should anticipate some healthier spending increases later this spring and summer."
No comments:
Post a Comment