Consumer Confidence showed a slight improvement in May, rising from 85.7 up to 86.6 but below consensus expectations for a reading of 87.0. While this month’s print was weaker than expected, the fact that confidence didn’t decline further is a moral victory and provides additional signs that activity bottomed out in April.
All of the improvement in this month’s report came from expectations which ticked higher for the second straight month while the Present Situation component actually made another low, falling to its lowest level since August 2013. It’s good to see that consumers are relatively upbeat about the future, but if the Present Situation index keeps making new lows, that will eventually bleed into sentiment towards the future as well. The key here will be Summer. Things will likely spiral in one way or the other. Either people come out and case counts start to spiral higher, or case counts remain stable and social activity spirals higher.
One reason we haven’t seen a bounce in consumer sentiment towards the Present Situation is that consumers feel increasingly uneasy about the job market. In this month’s survey, only 17.4% of consumers believe jobs are plentiful – a level not seen since 2014. This low of a reading is only natural when the majority of retail businesses are closed, but as things start to open back up, the hope, at least, is that job opportunities increase. Start a two-week free trial to Bespoke Premium to access our most actionable research and interactive tools.