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Consumer Confidence Ticks Up in May: But Wariness about the Future Persists

By at 28 May, 2024, 1:56 pm

by Raymond J. Keating –

Consumer concerns about where the economy is headed persisted in May, according to The Conference Board’s latest read on consumer confidence.

The topline reading of the Board’s Consumer Confidence Index came in at 102.0, which was up from a slightly revised upward reading of 97.5 in April.

Consumers clearly remained split, however. They appeared pretty comfortable with where things are currently. As it was reported that the Present Situation Index, which is “based on consumers’ assessment of current business and labor market conditions,” moved from 140.6 in April to 143.1 in May.

At the same time, the Expectations Index, which is “based on consumers’ short-term outlook for income, business, and labor market conditions,” despite rising to 74.6 in May from 68.8 in April, still remained firmly in recession territory. That is, the Board says that a reading under 80 indicates that a recession is ahead.

Dana M. Peterson, Chief Economist at The Conference Board, noted that consumers are far more likely to expect a recession in the coming 12 months than are CEOs, according to the Board’s CEO Confidence survey. While 35 percent of CEOs expect a recession, 69 percent – or about double – of consumers do. I’m rooting for CEOs to be right here.

But given misguided public policies on nearly all fronts currently, and toss in an unpredictable election, recession worries are well rooted. At the same time, though, the U.S. economy, including entrepreneurs and investors, has been amazingly resilient when confronted by misguided, costly policymaking. Clearly, there have been negative effects, with real economic growth under-performing for some time now (since 2007), but can the private sector continue to fight off anti-growth policymaking, and keep us out of a recession?

Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council. His latest books on the economy are The Weekly Economist: 52 Quick Reads to Help You Think Like an Economist, The Weekly Economist II: 52 More Quick Reads to Help You Think Like an Economist and The Weekly Economist III: Another 52 Quick Reads to Help You Think Like an Economist.

 

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