Consumer confidence in the United States rose in May to a five-year high, with expectations of an improved economy jumping after a fall tied to fiscal tightening, the Conference Board said Tuesday.
Regiane Naujock shops for groceries at Lorenzo's Supermarket in North Miami, Florida. Consumer confidence in the United States rose in May to a five-year high, with expectations of an improved economy jumping after a fall tied to fiscal tightening, the Conference Board said Tuesday.
The index pushed to 76.2 this month, compared to a revised 69.0 in April.
Consumers' views of current conditions were up slightly, as were their views of the current labor market.
But the expectations index surged to 82.4 from 74.3 in April, which Lynn Franco, the Conference Board's director of economic indicators, said appeared to represent a rebound after the tax hikes and the sequester spending cuts in the first quarter sparked worries of an economic downturn.
"Consumers' assessment of current business and labor-market conditions was more positive and they were considerably more upbeat about future economic and job prospects," Franco said in a statement.
"Back-to-back monthly gains suggest that consumer confidence is on the mend and may be regaining the traction it lost due to the fiscal cliff, payroll tax hike and sequester."
The May index came in well above expectations, said Jim O'Sullivan, chief US economist for High frequency Economics.
"In short, more evidence that the economy is improving, despite fiscal drag... the message is that the pluses are outweighing the minuses," O'Sullivan said.