Consumer confidence increases in May

Consumers are spending more, although a main factor is higher gas and food prices. 

Retail sales increased 0.5 percent in April after a 0.9 percent increase in March, the Commerce Department reported Thursday. Excluding a 2.7 percent increase in gas sales, the sales were up by only 0.2 percent.

The confidence index averaged 89 in the five years leading up to the recession that started in December 2007.

The Michigan report's index of current conditions, which reflects perceptions of finances and whether it is a good time to buy big-ticket items like cars, dropped to 80.2 from 82.5 the prior month.

Consumers are more positive looking down the road. 

The index of consumer expectations for six months from now, which more closely follows how consumers will spend money, jumped to 67.4 from 61.6, the largest increase since September 2009. 

Consumers expect an inflation rate of 4.4 percent in next 12 months, down from 4.6 percent in last month's report.