Consumer confidence in May has shifted to positive after five months of declines due to growing concern about trade in the US and economic uncertainty for Americans.
The Conference Board’s preliminary readings revealed that the Consumer Confidence Index went up by 12.3 to 98.0, an increase from 85.7 in April.
Additionally, 21.9% of respondents stated that business conditions were “good,” up by 19.2% from April.
Americans also have an improved view towards business operations, with 19.7% of consumers stating that they expect business conditions to improve, marking a 15.9% increase from April.
Stephanie Guichard, senior economist for global indicators at The Conference Board, commented: “The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards.
“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.”
Within the past four months, retail layoffs have been surging; however, consumers showed an improved view of the current job market.
According to the study, 19.2% of Americans expect more job positions to be available, an increase of 13.9% from April.
Consumer habits are also changing, with 36.7% of respondents investing in savings for future spending, 26.6% using savings for their goods, and 26% postponing major purchases.
This aligns with a recent survey that revealed that customers are spending less and increasing their caution to offset the impact of additional tariffs.
The increase in consumer confidence happened across all age and income groups.
A recent 90-day pause in tariff increases has provided relief for American consumers and retailers, with ongoing trade negotiations between the US and other countries.
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