For the first time in months, American consumers are feeling a bit more optimistic about the economy.
The Conference Board announced Tuesday that its consumer confidence index rose 12.3 points in May, to a reading of 98. It was the first monthly gain in the index in five months, with the improvement seen across all age and income groups, as well as all political affiliations.
The rebound in the index, which gauges consumers’ views on business conditions, employment prospects and future income, appears to be related to an easing in President Donald Trump’s trade war, at least in the short term. Trump has imposed huge tariffs on key trade partners and threatened to impose more, potentially boosting inflation and slowing the economy. But Trump has backed off those tariffs and threats to some extent in recent weeks, boosting the stock market and consumer attitudes.
“The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards,” said Stephanie Guichard, an economist at The Conference Board. (Trump’s return to tariff saber rattling against the European Union last week, followed by a brief postponement of hostilities, was too recent to be included in the May survey.)
The potential effects of tariffs remain a top concern for survey respondents. Consumers continue to be worried about the potential negative effects of tariffs on the economy, but also express hope that the tariffs could boost economic activity as well.
The White House was happy to take credit for the improvement. “Despite doomsday prophesizing by the ‘experts,’ President Trump’s America First economic agenda of tariffs, tax cuts, rapid deregulation, and domestic energy production continues to pay off,” a spokesperson said.