Consumer confidence in the United States saw a significant increase in May, rising by more than 12 points. This surge, measured by the Conference Board’s Consumer Confidence Index, reached a reading of 98.0, which is well above the expected 86.0. This positive shift marks the end of five consecutive months of declining confidence among consumers, suggesting a growing optimism about the economy, partly due to anticipated trade deals from President Donald Trump.
The increase in consumer confidence was reported in a survey released on Tuesday. Even before Trump announced a temporary truce with China on May 12, which helped reduce tariffs, confidence levels were already on the rise. Stephanie Guichard, a senior economist at the Conference Board, noted that the rebound was evident before the trade deal but gained momentum afterward.
The White House celebrated this positive news, with Communications Director Steven Cheung attributing the rise to what he called "THE TRUMP EFFECT!" The Present Situation Index, which reflects how consumers view current business and job market conditions, also showed improvement, climbing 4.8 points. The Expectations Index, which gauges consumers’ short-term economic outlook, jumped 17.4 points to 72.8, though it remains below the 80-point mark that often signals a recession.
Guichard explained that consumers are feeling less negative about business conditions and job availability in the coming months. They are also regaining hope about future income prospects. However, it is worth noting that assessments of job availability have weakened for five months in a row.
This boost in consumer confidence follows a period of low inflation, which recently hit its lowest level in over four years. Trump has also been active in trade negotiations, announcing a deal with the United Kingdom and delaying tariffs on the European Union after discussions with European Commission President Ursula von der Leyen. Additionally, the administration is reportedly making progress on trade deals with Japan and South Korea.
Overall, the rise in consumer confidence is a promising sign for the U.S. economy, reflecting a shift in public sentiment and expectations for the future.