May 27 (UPI) — The nonprofit research organization The Conference Board announced Tuesday that the confidence of American consumers in regard to current business and labor market conditions is on the rise but notes a recession could be on the horizon.
According to a press release, the Board’s Consumer Confidence Index increased in May by 12.3 points to 98, up from 85.7 in April. Its Present Situation Index, which is based on the assessment of American consumers on current business and labor market conditions, also went up 4.8 points to 135.9.
The Board’s Expectations Index, which measures the short-term outlook of American consumers in relation to business, income and labor market conditions also rose 17.4 points to 72.8. Global Indicators at The Conference Board Senior Economist Stephanie Guichard said that consumer confidence “improved in May after five consecutive months of decline.”
However, as per The Conference Board, when the Expectations Index stays below 80, it often signals an imminent recession.
Even so, the data indicates that consumers were more confident about potential job availability and business conditions over the next six months and had increased optimism about future income prospects.
Guichard also said that consumers’ outlook on stock prices improved as the market showed a positive direction in May “with 44% expecting stock prices to increase over the next 12 months,” an increase from 37.6% in April, “and 37.7% expecting stock prices to decline,” which is down from 47.2% in April.
“This was one of the survey questions with the strongest improvement after the May 12 trade deal,” she added.
The reported cutoff date for the data taken in for these scales was May 19, but around half were received after the May 12 announcement by the Trump administration that it had paused tariffs on Chinese imports.
“The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards,” Guichard also explained, but while Expectations Index had risen from April, “their appraisal of current job availability weakened for the fifth consecutive month.”
