The Conference Board attributed the rise to improvements in consumer expectations and the May 12 announcement of a pause on some tariffs on imports from China.
“The rebound was already visible before the May 12 U.S.-China trade deal but gained momentum afterward,” Stephanie Guichard, senior economist, global indicators at The Conference Board, said in a Tuesday press release. “The monthly improvement was largely driven by consumer expectations as all three components of the Expectations Index — business conditions, employment prospects and future income — rose from their April lows.”
Tariffs are still on top of consumers’ minds, according to consumers’ write-in responses about the topics that are affecting their views of the economy, according to the release.
Some consumers are concerned that tariffs may increase prices and have negative impacts on the economy, while others hope that trade deals will support economic activity, the release said.
Inflation and high prices were also mentioned in write-in responses, although some consumers said they saw an easing of inflation and lower gas prices, per the release.
A special question included in this month’s survey asked consumers if they changed their spending and financial behavior recently, according to the release. About 37% of consumers said they put money aside for future spending, 27% used savings to pay for goods and services, and 26% said they postponed major purchases.
“However, there were notable differences between income groups,” the release said. “Consumers in households making over $125K were more likely to say that they saved money while less wealthy households were more likely to have dug into their savings or postponed purchases,” the release said.
The University of Michigan said May 16 that its preliminary May reading on consumer sentiment came in almost 30% lower than it was in January and at the lowest level in nearly three years. The decline was driven by consumers’ perception of weakening income.
The May edition of the PYMNTS Intelligence report “Consumer Tariff Sentiment: Informed Americans Are Skeptical of the Benefits” found that more than 8 in 10 consumers said they were buying less, trading down or stretching out payments due to their concerns about the potential impact of tariffs.
