Consumer confidence in the economy ticked up slightly in May after several months of declines, according to data The Conference Board released Tuesday.
The consumer confidence index rose to 102 in May, up from 97.5 in April, the business group’s monthly survey found.
“Nonetheless, the overall confidence gauge remained within the relatively narrow range it has been hovering in for more than two years,” said Dana Peterson, chief economist at The Conference Board, in a statement.
Consumer confidence fell sharply following the outbreak of the COVID-19 pandemic in 2020, before largely recovering in 2021. However, it dipped again in late 2021 and early 2022, as inflation rose to a 40-year high.
Consumers’ views on current business and market conditions, as well as their short-term outlook for the future, ticked up in May, according to the survey. The present situation index rose from 140.6 last month to 143.1 this month, while the expectations index climbed from 68.8 to 74.6.
While Americans held slightly more negative views on current business conditions, their views on the current labor market were overall more positive, the survey found.
A smaller share of consumers in May said that business conditions were “good,” falling from 20.8 percent to 20.3 percent.
However, even as fewer consumers — 37.5 percent — said jobs were “plentiful” last month, fewer — 13.5 percent — also said jobs were “hard to get,” with the change in the latter slightly outweighing the former.
Six months from now, a larger share of consumers expect business conditions will improve, more jobs will be available and their income will increase. However, The Conference Board also noted its overall expectations index remains below 80, often an indicator of an impending recession.
Consumers’ perceived likelihood of a recession also ticked up for the second month in a row, according to the survey.
President Biden has struggled to shift largely negative perceptions about the state of the economy — a significant obstacle as he prepares to face off against former President Trump once again in November.
Inflation has improved significantly since reaching a 40-year high of 9.1 percent in June 2022, falling to 3.4 percent as of April. However, it remains stubbornly above the Federal Reserve’s target, prompting the central bank to maintain higher interest rates for longer.
Even as interest rates remain at a two-decade high, the labor market has remained surprisingly resilient, repeatedly blowing past expectations and maintaining an unemployment rate below 4 percent.