The Conference Board recently released new data regarding the consumer’s current outlook on the economy, and the results are rather surprising. As restrictions are being lifted across the US and some businesses are slowly returning to work, consumer confidence rose slightly for the month of May.
According to the Consumer Confidence Survey, the index has increased from 85.7 in April, to 86.6 in May, suggesting that economy may be faring better than expected. Regarding the short-term economic outlook for the upcoming six months, 3.5% more consumers felt optimistic about business conditions improving compared to the previous month. However, with respect to the assessment of current economic conditions, 16.3% of consumers felt business conditions are adequate, a significant drop compared to April’s rate of 19.9%.
Furthermore, consumer’s evaluation of the job market is also baring bleak results. Back in April, 18.8% of respondents felt that there was an abundance of jobs available in the market, now however, that figure has decreased to 17.4%. Even more alarming though is consumer’s outlook on short-term income prospects. The percentage of consumers anticipating an increase in income dropped from 17.2% to 14%.
Nonetheless, it appears that consumers are still not too optimistic about an economic recovery given that there could very well be a second wave of the coronavirus- thus creating a heightened level of uncertainty. Furthermore, with the Federal Reserve increasing the money supply, the US could soon enter into an inflationary period, resulting in decrease of purchasing power, thus causing consumers to save more of their income.
Information for this briefing was found via The Conference Board and CNBC. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.