WASHINGTON — US consumer confidence rose in May after three straight months of declines, although Americans remain concerned about inflation and interest rates.
The Conference Board, an industry research group, said Tuesday that its consumer confidence index rose to 102 in May from 97.5 in April. Analysts had expected the index to fall again.
The index measures both America's assessment of current economic conditions and their prospects for the next six months.
The measure of Americans' short-term expectations for income, business and the labor market rose this month to 74.6 from a dismal 68.8 in April. A reading below 80 may indicate a possible recession in the near future.
Consumer expectations about a recession in the coming year rose again in May, but are still well below their peak in May 2023. More than two-thirds of survey respondents said they believe a recession is “somewhat” or “very” probably in the US. the next 12 months. That contrasts with the Conference Board's survey of CEOs, only about a third of whom foresee a recession in the next 12 to 18 months.
The number of respondents who said they planned to buy a car rose slightly for the second month in a row, and those who said they planned to buy a major appliance rose for the first time in months, the board said.
Consumers who indicated they wanted to buy a home remained at the lowest level since August 2012. Sales of existing homes fell in April as high mortgage rates and rising prices discouraged potential buyers.
Consumers' assessment of current conditions increased from 140.6 in April to 143.1 in May.
Most economic indicators show that the US economy is in good shape by historical standards, although there are some signs that it is cooling.
The country's economy slowed sharply in the first quarter to 1.6% annualized despite high interest rates, compared with solid growth of 3.4% in the last three months of 2023.
Retail sales were flat in April after rising 0.6% in March as prices remained high and high interest rates made shoppers hesitant to make purchases on credit cards.
Reflecting their more cautious spending in the face of inflation, some major retailers are offering discounts this summer. The latest quarterly figures from major retailers show that although consumers have not stopped spending, they are becoming more price-conscious and choosy.
The board's survey also showed that consumer confidence in the labor market improved in May, despite a slowdown in hiring a month earlier.
The labor market continues to generate jobs, albeit not at the breakneck pace seen during the recovery from the pandemic. U.S. employers added 175,000 jobs in April, fewer than economists expected and down from 315,000 in March. Although the unemployment rate rose to 3.9%, it was the 27th month in a row that unemployment was below 4%, the longest stretch since the 1960s.
