Consumer Confidence Comes In As Expected

Consumer confidence came in about as expected, at a very strong 128.0 in May which is just below expectations but up noticeably from a downward revised 125.6 in April (initially 128.7).

Strength in the report is in the present situation which rose more than 4 points to 161.7. Significantly more consumers says jobs are currently plentiful, at 42.4 percent vs April's 38.2 percent, and about the same say they are hard to get, at 15.8 vs 15.5 percent.

Expectations also moved higher, up 1.3 points to 105.6 with sizably more, at 19.7 percent vs April's 18.6 percent, seeing more jobs opening up in the next six months. But buying plans are soft showing declines for cars, appliances and especially homes, at 5.5 percent for a 1.4 percentage point decline and what is the latest bad news out of the housing sector.

But there is good news for inflation expectations, up a sharp 3 tenths to 5.0 percent which, however, is still moderate for this reading. Confidence in the stock market is also picking up as the bulls rose more than 5 points to 38.3 percent and the bears sunk more than 12 points to 24.4 percent.

Of all the measures on consumer spirits, this report has been and remains the strongest. The lack of change for jobs-hard-to-get will keep up expectations for strength in Friday's employment report while the news on inflation will catch the eye of policy makers who are now more sensitive to overshooting their inflation target.