Consumer Confidence Jumps Higher Than Expected

Consumer confidence is moving up, to a higher-than-expected 134.1 in May for the best showing since November last year and in line with the mid-month jump posted in the consumer sentiment report. Forecasters will take note in today's report of a sharp drop in those who describe jobs as "hard to get", to 10.9 percent from April's 13.3 percent which points to strength for next week's May employment report.

More also say jobs are plentiful, up 1.2 percentage points to 46.5 percent, with future expectations also higher including a 2.5 point rise to 19.2 percent for those who see more jobs opening up in the next six months. Yet income prospects are no better than mixed, with more seeing an increase but more also seeing a decrease.

Inflation expectations rose sharply in the consumer sentiment report but are down in today's consumer confidence report, 2 tenths lower to 4.4 percent which is very low for this reading and suggests that ongoing tariff hikes are not yet, at least for this sample, a price factor.

Not all the signals in today's report are positive but the assessment of the current labor market is very much so. Confidence ultimately moves in line with job prospects and the outlook for the consumer remains very positive, perhaps a dormant positive given what has been so far this year a flat showing for consumer spending.