In May 2010, the estimate of US consumer confidence, as measured by the Conference Board, rose to 63.3 index points, from 57.7 in April 2010. The market was expecting the confidence index to rise to 59.0. The cut-off date for the survey was 18 May 2010, which was a day after the EU/IMF €750bn support package, for troubled EU countries, was announced.
The Present Situation Index rose to 30.2 from 28.2 in April 2010; which is still extremely low by historical standards. The key expectations index rose more convincingly in May from 77.4 to 85.3 (the long-term average for the expectations index is around 92).
According to the Director of The Conference Board Consumer Research Center: “Consumer confidence posted its third consecutive monthly gain, and although still weak by historical levels, appears to be gaining some traction. Consumers’ apprehension about current business conditions and the job market continues to slowly dissipate. Consumers’ expectations, on the other hand, have increased sharply over the past three months, propelling the Expectations Index to pre-recession levels. The improvement has been fueled primarily by growing optimism about business and labor market conditions. Income expectations, however, remain downbeat."
Overall, while there has now been a more noticeable improvement in US consumer confidence in the past three months, certainly relative to the record low of 25.3 recorded in February 2009, the confidence level remains extremely low by historical standards and well below the long-term average of around 95. Over the years, the single biggest factor that impacts consumer confidence is the state of the labour market, which is now hopefully past the worst.
The Consumer Confidence Survey is based on a representative sample of 5 000 US households
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