New York – Consumer confidence bounced back unexpectedly in May, helped by optimism about the job market even as shoppers’ concerns increased about inflation driven by gasoline prices.
The New York-based Conference Board said Tuesday its Consumer Confidence Index rose to 108.0 in May, up from a revised 106.3 in April. Analysts had expected the reading to fall to 104.5. In March, the index was at 108.2.
“The short-term outlook remains cautious and rising gasoline prices are having a negative impact on consumers’ inflation expectations,” Lynn Franco, director of the Conference Board Consumer Research Center, said in a statement. “All in all, confidence levels continue to suggest growth, albeit at a slow pace.”
The Present Situation Index, which measures how shoppers feel now about economic conditions, rose to 136.1 from 133.5 in April. The Expectations Index, measuring consumers’ outlook for the next six months, edged up to 89.2 from 88.2.
Economists closely monitor consumer confidence since consumer spending accounts for two-thirds of all U.S. economic activity.
The upbeat data helped push stocks higher.
“Although people may not be happy with high gasoline prices, they are happy with the job situation,” said Gary Thayer, chief economist at A.G. Edwards & Sons Inc. “… People are unhappy about things, but they are not changing their buying habits significantly.”
