US consumer confidence has increased more than expected amid weak US stock indexes and rising US-China trade tensions. The US consumer confidence index rose to 134.1 in May from 129.2 in April. The reading was the highest since November 2018. The index measures consumers' assessment of current economic conditions and their outlook for the next six months. Both improved in May. The US assessment of the world's largest economy reached the highest level since December 2000.
Their optimism reflects the strength of the US labor market, where the unemployment rate in the United States fell to 3.6%, near its lowest level in 50 years. Consumer sentiment remained high, although the Dow Jones industrial average fell more than 3% this month due to fears of a US-China trade war.
"Consumer confidence posted further gains in May and has now returned to the levels seen last fall when the index was hovering near its highest levels in 18 years," said Lynn Franco, senior director of research at the Conference Board, he added that the rise in the current situation index was driven primarily by employment gains, with consumers saying that "abundant" jobs rose to 47.2 % from 46.5 %, and the number of those claiming "job placement" fell to 10.9 % from 13.3 %, Cent.
The outlook also rose to 106.6 in May from 102.7 in April as consumers expressed more optimism about short-term outlook, the report said. The %age of consumers who expect working conditions will be better six months from now rose to 21.9% than 19.4 %, while those who expect conditions to worsen dropped to 8.4 % from 9.0 %.
Consumer expectations for the labor market were more favorable as the number of people expecting more jobs in the coming months rose to 19.2 % from 16.7 % and the number of those expecting less jobs fell to 12.5 % from 13.2 %.