Stocks, Housing Push Consumer Confidence to 5-Year High

 Stocks, Housing Pushes Consumer Confidence to 5-Year High With the stock market setting records regularly, surging home prices and inflation at bay, it’s no wonder consumer confidence is also reaching new post-crisis highs.
Consumer confidence jumped to the highest level in more than five years as the Conference Board’s sentiment index rose to 76.2 in May, beating all estimates in a Bloomberg survey of economists.
The index is also at the highest point since February 2008, according to the New York-based private research group in an update released today.
Also released today: the S&P/Case-Shiller index of home prices in 20 cities increased 10.9 percent over the past 12 months ending in March, the biggest 12-month gain since April 2006.
Economists were generally expecting the Conference Board’s Consumer Confidence Index to increase to 71.2. The same measure averaged 53.7 in the recession that ended in June 2009.
The Index now stands at 76.2 (1985=100), up from 69.0 in April. The Present Situation Index increased to 66.7 (the highest since May 2008) from 61.0. The Expectations Index improved to 82.4 from 74.3 last month.
The monthly consumer confidence survey is conducted for The Conference Board by Nielsen, the prominent  provider of analytics on what consumers buy and watch. The cutoff date for the preliminary results was May 15.
“Consumers’ assessment of current business and labor-market conditions was more positive and they were considerably more upbeat about future economic and job prospects,” said Lynn Franco, Director of Economic Indicators at The Conference Board,. “Back-to-back monthly gains suggest that consumer confidence is on the mend and may be regaining the traction it lost due to the fiscal cliff, payroll-tax hike, and sequester.”
Consumers’ appraisal of present-day conditions improved in May. Those saying business conditions are “good” increased to 18.8 percent from 17.5 percent. Those stating business conditions are “bad” decreased to 26.0 percent from 27.6 percent.
Consumers’ assessment of the labor market was also more positive. Those claiming jobs are “plentiful” increased to 10.8 percent from 9.7 percent, while those claiming jobs are “hard to get” edged down to 36.1 percent from 36.9 percent.
Consumers were much more optimistic about the short-term outlook. Those expecting business conditions to improve over the next six months increased to 19.2 percent from 17.2 percent, while those expecting business conditions to worsen decreased to 12.1 percent from 14.8 percent.

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