After a sharp decline in April, consumer confidence held steady in May as some businesses reopened in the wake of the COVID-19 pandemic, according to the Conference Board Consumer Confidence Index.
The monthly survey, published by The Conference Board, measures the degree of optimism expressed by Americans regarding the nation’s economy.
The overall Index stands at 86.6, up from 85.7 in April. The Expectations Index, based on consumers’ short-term outlook for income, business and labor market conditions, improved to 96.9 this month, up from 94.3 in April.
Still, not all of the measures saw an improvement.
The Present Situation Index, based on consumers’ assessment of business and labor market conditions, fell to 71.1, a dip from 73 in April.
“Following two months of rapid decline, the free-fall in confidence stopped in May,” said Lynn Franco, senior director of economic indicators at The Conference Board, in a statement. “The severe and widespread impact of COVID-19 has been mostly reflected in the Present Situation Index, which has plummeted nearly 100 points since the onset of the pandemic.”
Short-term expectations moderately increased as the gradual reopening of the economy helped improve consumers’ spirits, Franco added. “However, consumers remain concerned about their financial prospects,” she said.
In addition, Franco said fears of inflation continue to climb, which could lead to less purchasing power and curtail spending. While the decline in confidence appears to have stopped for the moment, the uneven path to recovery and a potential second wave are likely to keep a cloud of uncertainty hanging over consumers’ heads, she added.
The survey was conducted through May 14 by Nielsen, the global provider of information and analytics.
Researchers found that the percentage of consumers who said business conditions are “good” slipped to 16.3 percent in May, down from 19.9 percent last month, while those claiming business conditions are “bad” swelled to 52.1 percent, up from 45.3 percent in April.
Consumers’ appraisal of the job market was mixed. The percentage of consumers saying there were plenty of jobs slipped to 17.4 percent from 18.8 percent in April, while those who said jobs are “hard to get” decreased to 27.8 percent in May from 34.5 percent one month ago.
But consumers were moderately more optimistic about the short-term employment outlook. Those expecting business conditions to improve over the next six months increased to 43.3 percent from 39.8 percent, while those expecting business conditions will worsen fell to 21.4 percent from 25.1 percent in April.