US consumer confidence for May 98.0 versus 87.0 estimate.

• Prior month 86.0

• Index Value: The Consumer Confidence Index rose to 98.0 in May 2025, up from 86.0 in April 2025, surpassing the consensus estimate of 87.0.

• Present Situation Index: Declined to 135.9 from 133.5 in April 2025, indicating a slightly less optimistic view of current business and labor market conditions. Best since February

• Expectations Index: Jumped to 72.8 from 54.4 in April 2025, reflecting improved consumer optimism about short-term prospects for income, business, and labor markets, though still below the 80 threshold often associated with recession risks. Best since February.

• One year inflation expectations fell to 6.5% from 7.0%

• Key Drivers:

  • The significant rise in the Expectations Index suggests growing consumer optimism, potentially driven by easing concerns over tariffs or economic policies following April’s pessimism.

  • The Present Situation Index was less which indicates some caution regarding current economic conditions, possibly due to mixed signals in employment or business conditions.

• Context:

  • This marks a reversal from five consecutive months of declining confidence, with April 2025 hitting a nearly five-year low of 86.0. The high in November reached 112.80 before starting the decline.

  • The 10.9-point increase from April to May was a notable surprise, beating expectations significantly.

• Economic Implications:

  • The rebound in confidence could signal increased consumer spending, which accounts for ~70% of U.S. GDP, potentially supporting economic growth.

  • However, the Expectations Index below 80 still suggests some caution about recession risks in the near term.

• Survey Details:

  • Conducted by The Conference Board with Toluna, based on an online sample of ~5,000 households, assessing current and future business, employment, and income conditions.

  • Data cutoff for May 2025 results was approximately mid-May, with final results released on May 27, 2025

Other details from the Survey

Present Situation

Consumers’ assessments of current business conditions improved in May.

• 21.9% of consumers said business conditions were “good,” up from 19.2% in April.
• 14.0% said business conditions were “bad,” down from 16.3%.

Consumers’ views of the labor market weakened in May.

• 31.8% of consumers said jobs were “plentiful,” up slightly from 31.2% in April.
• 18.6% of consumers said jobs were “hard to get,” up from 17.5%.

Expectations Six Months Hence

Consumers were less pessimistic about future business conditions in May.

• 19.7% of consumers expected business conditions to improve, up from 15.9% in April.
• 26.7% expected business conditions to worsen, down from 34.9%.

Consumers’ outlook for the labor market outlook was also less negative in May.

• 19.2% of consumers expected more jobs to be available, up from 13.9% in April.
• 26.6% anticipated fewer jobs, down from 32.4%.

Consumers’ outlook for their income prospects turned positive in May.

• 18.0% of consumers expected their incomes to increase, up from 15.9% in April.
• 13.8% expected their income to decrease, up from 17.7%.

This article was written by Greg Michalowski at www.forexlive.com.