The Conference Board's Consumer Confidence Index rose to 95.4 in May, from a downwardly revised reading of 94.3 (previously reported at 95.2) in the prior month. The reading came in slightly above expectations, which called for a modest pullback to 95.0.
The gains in the headline index were entirely a result of an uptick in the present situation subcomponent, which rose by 3.0 points to 108.1. The future expectations subcomponent retreated by a slight 0.2 points falling to 86.9.
After moving decisively lower last month, it was nice to see the more upbeat reading in May. In particular, the gains in the present situation subcomponent ended what was previously a three-month slide.
The uptick in the percent of consumers' planning to purchase a home in the next six-months is an encouraging sign and suggests that the recent positive undertones in housing data will be sustained.
"The rebound in May consumer confidence alongside the strong reading in last month's employment figures supports a narrative of a bounce back in consumer spending over the coming months. Our current tracking has real personal spending rebounding to somewhere in around 3% (annualized) in the second quarter, though the risks appear slightly skewed to the downside after the soft April retail sales figure." said TD Economics
