Consumer confidence rose to 110.3 in May, the highest reading since June 2024, as Americans expressed growing optimism about the economy, the job market, and their personal financial situations. The Conference Board reported that the Present Situation Index increased to 155.2 while the Expectations Index rose to 79.8.
Respondents to the monthly survey expressed particular optimism about the job market, with those expecting more jobs in the coming months reaching the highest level since 2021. "Americans are feeling better about the economy because they see it in their paychecks and in the job opportunities available to them," said Conference Board Chief Economist Dana Peterson.
The survey found that 22.4 percent of consumers consider current business conditions "good," up from 18.7 percent in April. Those expecting business conditions to improve over the next six months rose to 21.3 percent, the highest reading in over two years.
Despite the optimistic sentiment, consumer spending remained relatively measured. Retail sales rose 0.2 percent in May, following a 0.3 percent increase in April, suggesting that consumers are cautiously optimistic without returning to the free-spending patterns of 2021.
"There is a clear improvement in consumer sentiment, but behavior has become more disciplined," said Goldman Sachs Senior Economist Maria Santos. "People feel better but are more thoughtful about their spending. That is a healthy combination."