Even with rising gas prices making summer travel more expensive, Americans continue to show signs of confidence in the economy.
After a slight dip last month, consumer confidence rebounded in May and remains at historically high levels, according to the latest report from The Conference Board.
The Index now stands at 128.0, up from 125.6 in April, the latest survey showed.
Consumers’ assessment of current conditions also increased this month to a 17-year high, suggesting that the level of economic growth in Q2 is likely to have improved from Q1, according to Lynn Franco, director of economic indicators at The Conference Board.
“Consumers’ short-term expectations improved modestly, suggesting that the pace of growth over the coming months is not likely to gain any significant momentum,” she added. “[But] overall, confidence levels remain at historically strong levels and should continue to support solid consumer spending in the near-term.”
Although it’s difficult to definitely state why consumer mood has remained generally higher in recent months, at least one explanation is encouraging unemployment rate — which fell to a historic low of 3.9 percent in April and has hovered around 4.1 percent for some time. The percentage of consumers stating jobs are “plentiful” improved from 38.2 percent to 42.4 percent, the survey found. Still, those claiming jobs are “hard to get” also increased, from 15.5 percent to 15.8 percent.
Even as fuel prices edged up, Americans’ assessment of current conditions improved in May with those claiming business conditions are “good” increasing from 34.8 percent to 38.4 percent. Meanwhile, those claiming business conditions are “bad” decreased from 12.3 percent to 12 percent. (According to data from the U.S. Energy Information Administration, the average price of a gallon of regular gasoline in the U.S. stood at $2.92 last week, up from $2.52 at the beginning of the year and $2.87 during the week prior.)
Positive news has also started to seep in on the retail side with department stores Macy’s Inc. and Kohl’s Corp. posting better-than-expected earnings results this month. U.S. retail sales also increased moderately in April, gaining 0.3 percent following sharp declines earlier in the year.
The monthly Consumer Confidence Survey is based on a probability-design random sample and is conducted for The Conference Board by Nielsen.