Consumer confidence surged in May

By Palm Beach Business.com

 DELRAY BEACH — Consumers are feeling the mojo coming back. But not yet in Florida

The Conference Board’s national Consumer Confidence Index shot up 14 points in May to a reading of 54.9, according to a report released Tuesday. The index is up nearly 30 points since bottoming out with a 25 reading in February.

Meanwhile, the University of Florida’s consumer confidence index slipped a point this month to 71. Much of the negative feelings are centered around consumers’ present financial circumstances, but they more confident about the near term future.

“Floridians are saying that in May they don’t have the money to buy, but they expect to within a year,” UF Survey Director Chris McCarty said. “They also expect the U.S. economy to improve over the next year, but are beginning to question its long term viability.

“Perhaps consumers are questioning what comes after the stimulus money runs out.”

Lynn Franco, director of the Conference Board’s Consumer Research Center, says it appears consumers believe the economy has turned the corner.

" Looking ahead, consumers are considerably less pessimistic than they were earlier this year, and expectations are that business conditions, the labor market and incomes will improve in the coming months,” Franco said “While confidence is still weak by historical standards, as far as consumers are concerned, the worst is now behind us."

The Conference Board survey found a few more consumers saying business conditions are "good," increasing to 8.7 percent from 7.9 percent. However, those claiming conditions are "bad" increased to 45.3 percent from 44.9 percent. Consumers' appraisal of the job market was also more favorable. Those claiming jobs are "hard to get" decreased to 44.7 percent from 46.6 percent in April. Those saying jobs are "plentiful" edged up to 5.7 percent from 4.9 percent.

Consumers' short-term outlook improved significantly in May. Those expecting business conditions will improve over the next six months increased to 23.1 percent from 15.7 percent, while those anticipating conditions will worsen declined to 17.8 percent from 24.4 percent in April.

The employment outlook was also less pessimistic. The percentage of consumers expecting more jobs in the months ahead increased to 20.0 percent from 14.2 percent, while those anticipating fewer jobs decreased to 25.2 percent from 32.5 percent. The proportion of consumers anticipating an increase in their incomes edged up to 10.2 percent from 8.3 percent.

McCarty still expects confidence to dip in at least in the short term as effects of the state budget and a GM bankruptcy begin to hit the economy.

“However on balance, the economic news while not necessarily good, is at least not shockingly bad day to day,” McCarty said. “Like the end of hurricane season, Floridians are grateful for a day, week or month without facing economic destruction. At this point, they just want to get about the business of cleaning up the mess.”