American consumers were feeling more a bit more optimistic in May following a slight decline in confidence in April.
The May reading matched Reuters’ estimates at 128, an increase from 125.6 in April. Consumers’ assessment of current conditions improved, showing better attitudes toward business conditions. This follows 127 reported in March and 130 in February’s 130.0, the highest reading in 18 years.
“Consumers’ assessment of current conditions increased to a 17-year high, suggesting that the level of economic growth in Q2 is likely to have improved from Q1,” said Lynn Franco, Director of Economic Indicators at The Conference Board.
Consumers were slightly positive about the short-term outlook in May despite a small decline in the percentage of consumers anticipating improvements in business conditions over the next six months.
The outlook for the labor market was mixed, as the percentage of consumers expecting improved short-term income prospects declined.
The Commerce Department reported that U.S. retail sales in April increased at a 0.3 percent rate, the Associated Press reports. This is a sign that consumers may be back after weak spending earlier this year.
“Overall, confidence levels remain at historically strong levels and should continue to support solid consumer spending in the near-term,” Franco said.
The index measures American’s sentiment on current economic conditions and expectations for the next six months. Consumer spending accounts for about 70 percent of U.S. economic activity, drawing economists’ attention to the numbers.