Confidence among U.S. consumers climbed in May to the highest level in more than five years as views on the economy and labor market improved.
The Conference Board’s index rose to 76.2, the strongest since February 2008 and exceeding the highest estimate in a Bloomberg survey of economists, from a revised 69 in April, data from the New York-based private research group showed today. The median forecast called for an increase to 71.2.
The gain in sentiment coincides with rising property values and stocks that are providing a boost for household balance sheets at the same time the job market heals. Further improvement in Americans’ outlooks may encourage a pickup in consumer spending, which accounts for about 70% of the economy.
“Equity market strength and particularly job growth, that’s really the key,” David Sloan, senior economist at 4Cast Inc. in New York, said before the report. “The economy and confidence will move up together. As employment grows, people can feel more secure in spending.”
Forecasts of the 75 economists surveyed by Bloomberg ranged from 65 to 76 after a previously reported 68.1 in April. The measure averaged 53.7 in the recession that ended in June 2009.
The Conference Board’s gauge of consumer present conditions advanced to 66.7 in May, the highest since May 2008, from 61 a month earlier. The measure of expectations for the next six months jumped to 82.4, the highest since October, from 74.3.
Those expecting business conditions to improve in the next six months climbed to 19.2% in May, the highest since November, from 17.2% the prior month.
The share of consumers expecting more jobs to open in the next six months increased to a five-month high of 16.8% in May from 14.3% in April.
The number of respondents who said jobs are currently plentiful rose to 10.8% in May from 9.7%. The share that said positions were hard to get eased to 36.1% from 36.9%. The difference between those who said jobs were hard to get and respondents who said employment opportunities were plentiful matches December as the smallest since September 2008.
The economy added 219,000 jobs in December, according to Labor Department data, boosted by unseasonably mild temperatures that helped lift industries such as construction.
The share of those expecting their incomes to increase in the next six months fell to 16.6% from 16.8%, today’s figures showed.