By Katia Dmitrieva
May 28, 2019
U.S. consumer confidence rose by more than expected to the highest level since November as Americans felt the best about current economic conditions in 18 years, highlighting the effects of a robust labor market and rising wages.
The Conference Board’s index climbed to 134.1 in May, according to data from the New York-based group Tuesday that topped economist estimates in a Bloomberg survey. The gauge of views on the present situation increased to 175.2, the highest since December 2000, while the expectations index rose to a six-month high of 106.6.
- The broad-based gain in sentiment bodes well for consumer spending, which makes up the majority of the U.S. economy, amid unemployment near a five-decade low, sustained wage gains and more affordable mortgages. At the same time, trade continues to cloud the economic outlook, with Americans set to bear the cost of higher tariffs on Chinese goods that may weigh on sentiment in coming months.
- The report is in line with other indicators showing elevated consumer confidence and follows data indicating the economy expanded by a more-than-expected 3.2% in the first quarter. The University of Michigan’s sentiment index also jumped to a 15-year high in May and the Bloomberg Consumer Comfort gauge remained near recent highs last week, driven by views on the buying climate.
“Consumers expect the economy to continue growing at a solid pace in the short term, and despite weak retail sales in April, these high levels of confidence suggest no significant pullback in consumer spending in the months ahead,” Lynn Franco, senior director of economic indicators at the Conference Board, said in a statement.
- Respondents saying jobs are plentiful increased to 47.2 percent, while those who saw jobs as hard to get fell to 10.9 percent. That brought the labor differential — which measures the gap between those two measures — to the highest since 2000.
- Buying plans for cars, homes and major appliances all increased, with the share of respondents planning a car purchase within six months climbing to a record in data going back to the 1960s.