The figures: The Conference Board said on Tuesday that the consumer confidence index increased from a revised 85.7 in May to 98 in May. After five consecutive months of loss, this is the first rise.
The Wall Street Journal questioned economists who predicted the index will remain stable at 86 in April, the lowest level since the outbreak.
According to the Conference Board, confidence increased following the truce reached in mid-May in U.S.-China trade negotiations.
Important information: A gauge of consumers’ current sentiment toward the economy increased 4.8 points to 135.9.
In May, a six-month forward-looking optimism measure jumped 17.4 points to 72.8. Particularly poor has been the subindex.
For the seventh consecutive month, consumers’ perception of job availability declined even though they were more optimistic about the state of business.
Approximately 31.8% of consumers reported that there were plenty of employment in May, a little increase from the previous month.
Additionally, 18.6% of consumers—up from 17.5% in April—said it was difficult to get a job.
Overall: Earlier Tuesday, Tom Barkin, president of the Richmond Federal Reserve Bank, stated that despite the decline in sentiment, consumer spending had remained stable.
In a Bloomberg interview, Barkin stated, “There is no evidence that drops in sentiment drop spending.”
Considering the future: “With the reduction of tariffs, particularly with China, Americans have cause to rejoice, and consumer confidence may have skyrocketed. However, it will serve as a sobering reminder that a new battle against inflation has just begun when prices begin to rise as a result of current tariffs in a month or two, according to Robert Frick, corporate economist with Navy Federal Credit Union.
Market response: On Tuesday, the SPX began higher on additional indications that trade tensions around the world would subside. Early in the morning, the yield on the 10-year Treasury, BX:TMUBMUSD10Y, dropped to 4.47%.
