Continuing its upward trajectory in April, consumer confidence increased again in May in response to a continued rally in the stock market and strengthening housing economy.
The news indicates an improved outlook for the nation's economy and job possibilities, according to The Conference Board Consumer Confidence Index.
Consumers’ attitudes rose to a score of 69.0 in April, after falling to an upwardly revised 61.9 index score in March. However, the latest index revealed an even stronger increase, now standing at 76.2, a five-year high.
"Consumers' assessment of current business and labor-market conditions was more positive and they were considerably more upbeat about future economic and job prospects," said Lynn Franco, director of economic indicators at The Conference Board.
Franco added, "Back-to-back monthly gains suggest that consumer confidence is on the mend and may be regaining the traction it lost due to the fiscal cliff, payroll-tax hike, and sequester."
The number of consumers that consider business conditions as "good" rose from 17.5% in April to 18.8% in May, while 26.0% of consumers say business conditions are "bad," down from 27.6% in April.
Assessment of the labor market was also more positive by consumers, with 10.8% of consumers claiming jobs are "plentiful," up from 9.7% in April. However, those claiming jobs are "hard to get" dropped down 36.1% from 36.9%.
Analysts at Econoday added, "Measures of consumer spirits are all moving higher, either at recovery bests or testing recovery bests. This improvement is centered on one central fundamental — improvement in the jobs market. The Dow is moving to opening highs following today's report."