Consumer confidence increases after five-month decline

Consumer confidence has increased after a five-month decline, reaching 98 points in May, up from 85.7 in April, according to the Consumer Confidence Index on Tuesday.

The rebound follows President Trump's announcement on May 12 that a pause was being implemented on some tariffs on Chinese imports.

“Consumer confidence improved in May after five consecutive months of decline,” according to Stephanie Guichard, senior economist for the Global Indicators at The Conference Board. “The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards.

"The monthly improvement was largely driven by consumer expectations as all three components of the Expectations Index – business conditions, employment prospects, and future income – rose from their April lows," she continued.

"Consumers were less pessimistic about business conditions and job availability over the next six months and regained optimism about future income prospects. Consumers’ assessments of the present situation also improved. However, while consumers were more positive about current business conditions than last month, their appraisal of current job availability weakened for the fifth consecutive month.”

The Conference Board's Expectations Index, which is based on a six-month consumer outlook for income, business, and labor market conditions, increased 17.4 points to 72.8, but is still below the 80-point threshold, which usually signals an upcoming recession.

The confidence increase was across all age and income groups and political affiliations, with Republicans having the strongest improvement.