US Consumer Confidence Rebounds in May, Signaling a Tying of ‘Economic Confidence to Trump’s Trade War’

It appears that consumer confidence among American citizens, a metric which has been consistently dipping lower and lower for months now, has enjoyed a bit of a reversal, according to a May 27 press release issued by The Conference Board.

The board’s Consumer Confidence Index ticked upward by 12.3 points in May to reach 98.0 (a baseline score of 100 being notched in 1985), a figure up from 85.7 in April.

Meanwhile, the Present Situation Index — a score assigned based on respondents’ current assessment of income, business, and labor market health — rose by 4.8 points to reach a total of 135.9. Finally, the Expectations Index — a score given to consumers’ take on the near-term assessment of the aforementioned conditions — rallied by 17.4 points to rest at 72.8, still short of the threshold of 80. Any score below 80 on the Expectations Index may represent a likelihood of recession ahead, according to the board.

“Consumer confidence improved in May after five consecutive months of decline,” said Stephanie Guichard, senior economist of global indicators at The Conference Board.

“The rebound was already visible before the May 12 U.S.-China trade deal but gained momentum afterwards. The monthly improvement was largely driven by consumer expectations as all three components of the Expectations Index — business conditions, employment prospects, and future income — rose from their April lows. Consumers were less pessimistic about business conditions and job availability over the next six months and regained optimism about future income prospects. Consumers’ assessments of the present situation also improved,” Guichard added.

The turnaround in U.S. consumer sentiment was widespread across all age and income groups, but those respondents who identified as Republicans exhibited the strongest positive reaction in May.

US Consumer Confidence Appears To Be Strongly Tied to Trump Administration Trade Policy, Tariffs

As Axios reporter Courtenay Brown suggested, this latest report from The Conference Board highlighted one ongoing trend.

“The data shows how closely consumers tie their economic confidence to Trump’s trade war, with concerns about personal finances, inflation and employment prospects receding when tariff tensions appear to be cooling,” Brown wrote.

That seems to align with findings put forth from facts delivered deeper in the press release, with write-in responses related to which particular issues might be most pressing for Americans indicating that tariffs were still top of mind. A mixed array of opinions related to these trade measures was in evidence.

“Notably, consumers continued to express concerns about tariffs increasing prices and having negative impacts on the economy, but some also expressed hopes that the announced and future trade deals could support economic activity,” the board noted.