U.S. consumer confidence rebounds in May, signaling a shift after five straight months of falling optimism. The temporary pause in higher tariffs between the U.S. and China has helped restore some faith among consumers. However, worries about tariffs pushing prices higher and affecting the economy remain strong.
The Conference Board reported that its consumer confidence index jumped 12.3 points to 98 in May. This increase far exceeded economists’ expectations, who had predicted a modest rise to 87. The boost came after a U.S.-China trade deal announced on May 12, which paused tariff hikes for 90 days. The U.S. agreed to reduce tariffs on Chinese imports from 45% to 30%, while China cut its tariffs from 25% to 20%.
Stephanie Guichard, a senior economist at the Conference Board, noted that the rebound in confidence was visible even before the trade agreement. However, the deal gave consumer expectations additional momentum. She explained that all three parts of the Expectations Index—business conditions, job prospects, and future income—improved from their April lows.
Moreover, consumers felt more optimistic about business conditions and their future income. Yet, Guichard pointed out that people viewed current job availability less favorably for the fifth month in a row. This contrast highlights lingering concerns in the labor market despite rising overall confidence.
The improvement in U.S. consumer confidence rebounds cut across all age groups, income brackets, and political affiliations. However, the Conference Board cautioned that the six-month moving average still reflected a decline due to prior months’ weakness.
Tariffs remained a hot topic in the survey’s open-ended responses. Many consumers expressed concern over tariffs raising prices and harming the economy. At the same time, some showed hope that current and upcoming trade deals could boost economic growth.
Finally, while inflation and high prices continued to trouble consumers, some mentioned easing inflation and lower gas prices as positive developments. These mixed views reflect cautious optimism about the near-term economic outlook.
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