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U.S. Consumer Confidence Rebounds for First Time in Months

U.S. Consumer Confidence Rebounds for First Time in Months

U.S. consumer confidence appears to have some pep in its step following three months of declines. After a gloomy streak since January, people are starting to see the silver lining, thanks largely to more job market optimism, as reported by Reuters.

The Conference Board, an independent, non-profit think tank, announced that its consumer confidence index had jumped to 102 in May, up from April’s 97.5. This came as a pleasant surprise, since many experts were bracing for yet another dip.

The index operates like a mood ring for the economy, measuring how people feel about current conditions and their outlook for the next six months. And attitudes have definitely shifted for the better.

Americans’ short-term expectations for income, business, and jobs took a significant leap, with the index climbing from 68.8 in April to 74.6 in May. This uptick is a welcome change, since any number under 80 can hint at a possible recession—the specter of which still looms in the minds of many.

On a more positive note, folks are feeling pretty bullish about the stock market. Nearly half of consumer confidence survey respondents expect stock prices to climb over the next year, while only a quarter foresee a drop. This optimism isn’t out of nowhere—major stock indexes have been on a tear, with the Nasdaq Composite even flirting with the 17,000 mark in recent trading.

According to the Federal Reserve Bank of New York’s April 2024 survey, more Americans are hopeful about a bump in the federal minimum wage, enhanced welfare and unemployment benefits, and increased federal student aid and loan forgiveness.

However, it’s not all sunshine and rainbows. Inflation persists, and with home prices soaring, there’s growing gloom around housing assistance and affordable housing. On the flip side, homeowners are feeling a bit more hopeful about tax breaks. The chance of a higher mortgage interest tax deduction hit 24.8%—the highest since the series started back in November 2015.

Overall, most indicators paint a picture of a U.S. economy that’s doing pretty well historically. So, while the financial landscape still has its fair share of clouds, May’s boost in consumer confidence is an encouraging sign that there are brighter days ahead.

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