With consumers seeing signs of better times ahead for the recession-mired economy, consumer confidence leapt in May to an eight-month high, the Conference Board said on May 26. The business research group's consumer confidence index, based on a representative sample of 5,000 households, spiked to 54.9 in May from 40.8 in April.
The May reading was the highest since last September, when the collapse of Lehman Brothers accelerated a global financial crisis that has pushed the world economy into a severe downturn.
In May, almost all of the surge in confidence was in the short-term outlook, and consumers saw just moderate improvement in current conditions. "While confidence is still weak by historical standards, as far as consumers are concerned, the worst is now behind us," said Lynn Franco, the Conference Board's research director. Franco said that the survey signaled that economic growth in the second quarter "is likely to be less negative than in the first."
In the first quarter, the world's largest economy shrank by a sharp 6.1% after a 6.3% contraction in the 2008 final quarter.
The present-situation index showed that those viewing business conditions as "good" increased to 8.7% from 7.9%, while those claiming they were "bad" increased to 45.3% from 44.9%.
Consumers saw brighter prospects in the embattled labor market, despite a surge in the unemployment rate in April to a 25-year high of 8.9%. Consumers claiming jobs were "hard to get" fell to 44.7% in May from 46.6% in April. Those saying jobs were "plentiful" edged up to 5.7% from 4.9%. Consumers expecting more jobs available jumped to 20% from 14.2%, while those anticipating fewer jobs fell to 25.2% from 32.5%.
Those expecting business conditions will improve over the next six months increased to 23.1% from 15.7%, while those anticipating conditions will worsen declined to 17.8% from 24.4% in April.
The percentage of consumers expecting their incomes to rise in the short-term rose to 10.2% from 8.3%.
Copyright Agence France-Presse, 2009