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Consumer confidence sees surprise uptick in May — survey

By AFP - May 29,2024 - Last updated at May 29,2024

The consumer price index in February rose 6%, below January figure but still well above 2% goal (AFP file photo)

WASHINGTON — US consumers appeared less gloomy about the job market and future business conditions in May, according to a survey released on Tuesday.

The Conference Board's consumer confidence index posted a surprise increase this month to 102.0, despite analyst expectations of a decline from April's 97.5 level.

"Confidence improved in May after three consecutive months of decline," said The Conference Board's chief economist Dana Peterson.

While consumers' were less optimistic of current business conditions than before, "the strong labor market continued to bolster consumers' overall assessment of the present situation", Peterson said.

Meanwhile, fewer people expected a worsening in future business conditions, job availability and income, she added in a statement.

But consumers appeared wary of inflation, with expectations of price hikes ticking up — alongside an anticipation of higher interest rates.

"The survey also revealed a possible resurgence in recession concerns," Peterson warned, noting that more people believed a recession is somewhat or very likely in the next 12 months.

While an improvement in sentiment is "welcome news," current readings remain "well below pre-pandemic levels", said Rubeela Farooqi, chief US economist at High Frequency Economics.

An earlier survey published by the University of Michigan signaled that confidence has been "knocked back by dimming expectations for interest rate cuts and a revival of worries about job security", noted Pantheon Macroeconomics. 

"Weakening consumer confidence can be added to the list of reasons to expect growth in real consumption to slow soon," Pantheon added in a recent note.

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