A one-month boost does not necessarily mean that confidence has turned a corner. Confidence may well bounce around from month to month until the economy convincingly picks up. This report does not preclude further Fed rate cuts, however, since business conditions are still weak. The Numbers Consumer confidence rose by 6.5 points in May to 115.5. Driving confidence higher are improved expectations about future conditions.
Consumers are still concerned about the labor market.
The share of households that believes that jobs are plentiful has fallen to 39.5, its lowest since early 1998. However, consumers also expect that labor market conditions will improve in coming months. May. In particular, vehicle buying plans rose sharply. However, spending plans tend to be volatile. Buoying consumers also are expectations of improved stock market performance and continued declines in interest rates.