Consumer Confidence Up Sharply
The Conference Board Consumer Confidence Index, which made considerable gains in April, surged again in May to its highest level in eight months, as employment concerns ease. The index now stands at 54.9, up from 40.8 in April and significantly higher than February's reading of 25.0. "Continued gains in the Present Situation Index indicate that current conditions have moderately improved, and growth in the second quarter is likely to be less negative than in the first," says Lynn Franco, Director of the Board's research center. The recently troubled job market appeared more favorable to consumers in May, with 44.7% claiming jobs are "hard to get," down from 46.6% in April. The percentage of consumers expecting more jobs in the months ahead jumped from 14.2% to 20%, while those anticipating fewer jobs decreased to 25.2% from 32.5%. And the proportion of consumers anticipating an increase in their incomes climbed to 10.2%. Consumers' appraisal of overall current conditions made significant headway, according to the Board. Those claiming current business conditions are "good" increased to 8.7% from 7.9%. Although, those saying business conditions are bad also increased, from 44.9% to 45.3%. But looking ahead, consumers are considerably less pessimistic than they were earlier this year, Franco explains. "Expectations are that business conditions, the labor market and incomes will improve in the coming months. While confidence is still weak by historical standards, as far as consumers are concerned, the worst is now behind us." Consumers' short-term outlook revealed increasing expectations that business conditions will improve over the next six months. Those anticipating conditions will worsen declined significantly to just 17.8% from 24.4% in April. Write to Kelly Curran.