Key Highlights
- According to the Conference Board latest survey, Americans feeling worse about present and a bit better about future than last month
- Conference Board reports that gradual reopening of economy helped improve consumer sentiments
Americans are still feeling blue about present business conditions but are beginning to feel more upbeat about the future than they did last month, according to the Conference Board’s most recent Consumer Confidence Index report. In fact, more than +43% of those surveyed for this Conference Board report indicated that their expectations were for business conditions improving over the next six months.
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Since consumer spending makes up approximately two-thirds of America’s GDP, an uptick in consumer confidence regarding business conditions over the next six months is very good news.
Lynn Franco, senior director of economic indicators for the Conference Board, said, “While the decline in (consumer) confidence appears to have stopped for the moment, the uneven path to recovery and potential second (coronavirus) wave are likely to keep a cloud of uncertainty hanging over consumers’ heads.”
The Conference Board’s research team attributed the slight uptick in consumer confidence to “the gradual reopening of the economy (which) helped improve consumers’ spirits.”
The breakdown of consumer response to this monthly survey about present business conditions looked like…
- NOW
- Good – 16.3% this month from 19.9% last month
- Bad – 52.1% this month from 45.3% last month
- The Present Situation Index declined from April’s 73.0 to May’s 71.1.
Consumer response about near future business conditions looked like…
- OVER NEXT 6 MONTHS
- Expecting improvement – 43.3% this month from 39.8% last month
- Expecting decline – 21.4% this month from 25.1% last month
Having a handle on the latest consumer confidence level helps us all, individuals and businesses alike, have a better sense of how households may behave in terms of consumer spending and saving. An indicator above 100 signals a boost in confidence towards our future economic situation while a level ranking below 100 signifies a more pessimistic attitude towards future economic development, i.e.., higher confidence = more spending; lower confidence = more saving.
In May, the consumer confidence index stood at an unexpected 86.6, up from 85.7 in April. Economists polled by Dow Jones anticipated a consumer confidence level of 82.3 this month.
Thanks to The New York Times and CNBC.
Also read: Confidence in Housing Weakening as Affordability Improving, 2019 Drop in Foreign Sales Temporary or Prognostic?, Multi-Family Originations to Hit All-Time High in 2020
