May consumer confidence tops estimates as the US unwinds economic shutdowns

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  • Consumer confidence stabilized in May as lockdowns eased and businesses began reopening, according to a Tuesday report from The Conference Board.
  • The organization’s Consumer Confidence Index ticked higher to 86.6 from April’s 85.7 reading. Economists surveyed by Dow Jones expected the metric to sink to 82.3, CNBC reported.
  • Present-day sentiments sank to 71.1 from 73, The Conference Board added. Short-term outlooks improved, however, leaping to 96.6 from 94.3.
  • “While the decline in confidence appears to have stopped for the moment, the uneven path to recovery and potential second wave are likely to keep a cloud of uncertainty hanging over consumers’ heads,” Lynn Franco, senior director of economic indicators at The Conference Board, said in a statement.
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Consumer confidence beat expectations and ticked higher through May as lockdowns were gradually reversed, according to a Tuesday release from The Conference Board.

The organization’s Consumer Confidence Index jumped to 86.6 for May from 85.7 in April. Economists expected the metric to slide to 82.3, CNBC reported, citing a Dow Jones survey.

Consumers’ present-day sentiments of the business and labor markets dropped to 71.1 from 73. Short-term outlooks for income, business, and job market conditions gained to 96.6 from 94.3 last month.

“Following two months of rapid decline, the free-fall in Confidence stopped in May,” Lynn Franco, senior director of economic indicators at The Conference Board, said in a statement. “While the decline in confidence appears to have stopped for the moment, the uneven path to recovery and potential second wave are likely to keep a cloud of uncertainty hanging over consumers’ heads.”

Read more: A Wall Street chief strategist analyzes 4 recessions throughout history to explain why investors should still be buying stocks — even as the economy hurtles into depression

All 50 states have reopened their economies to some degree after monthslong shutdowns forced a spike in unemployment. The nine-week total for jobless claims neared 39 million on Thursday, and economists anticipate the unemployment rate will skyrocket as high as 25% before declining in the second half of the year.

The Conference Board’s report arrived as other economic indicators staged mild rebounds. New home sales data released by the Census Bureau on Tuesday showed a mild uptick in April from the month prior. The metric still sat about 6% lower compared to the year-ago period.

Optimism around economic reopenings has also boosted the stock market from its virus-induced lows. Equities soared Tuesday morning as investors cheered the unwinding of lockdowns and hopes for a coronavirus vaccine. The S&P 500 index topped 3,000 for the first time since early March.

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