Consumer confidence bounced back in May after a sharp decline the previous month, underscoring increased optimism about jobs and the future of the U.S. economy. May. The Conference Board index, based on a monthly survey of some 5,000 U.S. households, is considered a key indicator because consumer spending accounts for about two-thirds of the nation's economic activity. Eroding consumer confidence, hurt in part by higher energy costs and layoffs across the country, has contributed to two quarters of anemic growth for the U.S. economy. The Federal Reserve Board has cut interest rates five times this year in an effort to keep the economy from sliding into a recession.
Consumers now seem to believe the economy is poised for a rebound.
Nonetheless, the index showed no signs that consumers will curtail their spending, which points to continued economic growth, she added. Another report released today also indicated a strengthening economy. The Commerce Department reported today that consumer spending rose by 0.4 percent in April, following a 0.2 percent increase the month before. May's rise marked the biggest increase since January and came after April's confidence numbers dipped from a reading of 116.9 in March. The markets were mixed following the release of the reports, with the Dow Jones industrial average up 14 points to 11,019 and the Nasdaq composite index off 45 points to 2,205.