Consumer confidence reaches 5-year high

The Conference Board reported that its confidence index now stands at 76.2, up from 69 in April. Scores above 100 on the scale indicate boom-time exuberance.

The strong data comes as home prices recorded their greatest surge in seven years. That data sent U.S. stocks higher in morning trading.

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The consumer data is a sign that the 2-percentage point payroll tax increase and the $80 billion budget sequester cuts may be having a limited impact.

“Consumers’ assessment of current business and labor-market conditions was more positive and they were considerably more upbeat about future economic and job prospects. 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,” said Lynn Franco of The Conference Board.

As of May 15, some 18.8 percent of survey respondents said that business conditions are good, up from 17.5 percent in April. Only 26 percent said business is “bad,” down from 27.6 percent.

Looking to the future, only 12.1 percent of consumers say business conditions will worsen in the next six months, a drop from 14.8 percent in April.