Washington: US consumer confidence was stabilized in May at 86.6, after two months of sharp declines as the coronavirus pandemic slammed the world´s largest economy, according to a survey...
Washington: US consumer confidence was stabilized in May at 86.6, after two months of sharp declines as the coronavirus pandemic slammed the world´s largest economy, according to a survey released on Tuesday.
While The Conference Board´s confidence index was above the reading in April, which was revised down to 85.7, the May result was just below analysts´ expectations.
Consumers gave a gloomy assessment of the current economic climate, with the survey´s Present Situation Index falling to 71.1 from 73.0 in the prior month, though they were optimistic about the future: the Expectations Index improved to 96.9 from 94.3 in April.
"Following two months of rapid decline, the free-fall in confidence stopped in
May," said Lynn Franco, senior director of economic indicators at The Conference Board.
But Franco cautioned that "the uneven path to recovery and potential second wave are likely to keep a cloud of uncertainty hanging over consumers´ heads."
More than half of consumers described business conditions as "bad" in May, the survey found, with just 16.3 percent describing them as "good," a decrease from April.
However 43.3 percent of consumers expected conditions to improve over the next six months, while only 21.4 percent expected them to worsen, a smaller share than the last survey.
Perceptions of the job market were less straightforward. The share of consumers describing jobs as "plentiful" or "hard to get" each declined from April, to 17.4 percent and 27.8 percent, respectively.
Similar dissonance was seen in expectations for job availability, where the percentages of consumers expecting both more and fewer jobs declined in May.
In an analysis, Oxford Economics said consumers´ dim expectations for their income "may restrain consumer spending and the overall recovery."
Only 14 percent of those surveyed expected their incomes to increase in May and while the proportion expecting a decrease declined to 15.0 percent from 18.4 percent in April, it was still at a fairly elevated level.
Meanwhile, a government data showed that new US home sales edged up in April after two months of steep declines, but prices continued to fall amid the pandemic shutdowns.
Sales last month rose 0.6 percent to a seasonally adjusted annual rate of 623,000, although the gain came after sales figures for March were revised lower, according to the Commerce Department report.
While the figures show the result remains 6.2 percent below the pace seen in April 2019, they point to continued solid demand in the key US housing market.
That demand could help the post-pandemic recovery once the economy fully reopens from the lockdowns imposed by COVID-19.
With potential buyers still reluctant to venture out, the median sales price fell for the second month to $309,900, a $17,000 drop from March, according to the report.