Consumer confidence climbs to eight-month high

Consumer confidence rose to 40.8 in May compared with the previous month and now stands at 54.9 (1985=100), according to a report released yesterday by The Conference Board. The Board’s Present Situation Index increased to 28.9 in May from 25.5 the previous month, while its Expectations Index rose to 72.3 this month compared with 51.0 in April

“Continued gains in the Present Situation Index indicate that current conditions have moderately improved, and growth in the second quarter is likely to be less negative than in the first,” said Lynn Franco, director of The Conference Board Consumer Research Center. “Looking ahead, consumers are considerably less pessimistic than they were earlier this year, and expectations are that business conditions, the labor market and incomes will improve in the coming months. While confidence is still weak by historical standards, as far as consumers are concerned, the worst is now behind us."

Consumers' short-term outlook improved significantly in May, according to the report. Those expecting business conditions will improve over the next six months increased to 23.1 percent in May from 15.7 percent in April, while those anticipating conditions will worsen declined to 17.8 percent this month compared with 24.4 percent in April.