Confidence among U.S. consumers rose in May to the second-highest level since 2008 as Americans grew more upbeat about the economy and labor market. The Conference Board’s index climbed to 83 from 81.7 a month earlier that was weaker than initially estimated. The reading matched the median forecast in a Bloomberg survey of 62 economists. Higher stock prices and home values are underpinning sentiment for some Americans. A broadening of the pickup in employment that leads to stronger wage gains would help to further boost sentiment and propel the consumer spending that accounts for almost 70 percent of the economy.
Estimates of consumer sentiment ranged from 71.5 to 85.1 in the Bloomberg survey after a previously reported March reading of 82.3. The Conference Board’s measure averaged 53.7 in the recession that ended in June 2009. The figures stand in contrast to other readings on sentiment. The Thomson Reuters/University of Michigan index unexpectedly fell in May from a nine-month high. The preliminary reading dropped to 81.8 from 84.1 in April. The Conference Board’s gauge of present conditions rose to 80.4 after 78.5 in April. The barometer of consumer expectations for the next six months advanced to 84.8 from 83.9 a month earlier.
“Expectations regarding the short-term outlook for the economy, jobs and personal finances were also more upbeat,” Lynn Franco, director of economic indicators at the Conference Board, said in a statement.
The share of respondents who said they expected their incomes to rise climbed to 18.3 percent in May, the highest since the end of 2007, from 16.8 percent a month earlier. More also expected their incomes to decline. The proportion of Americans who said jobs would become more plentiful in the next six months rose to 15.4 percent, the highest this year, from 14.7 percent.