• Jobs, income, restrained inflation continue to drive consumer confidence
  • Lower 2nd quarter estimated GDP with limited impact
  • Confidence stable near two decade high

The Conference Board will release its Consumer Confidence Index for May at 10:00 am EDT, 14:00 GMT on Wednesday May 28th. 


The Consumer Confidence index from the business group the Conference Board is predicted to rise to 130.0 in May from 129.2 in April. The Present Situation Index in April was 168.3 up from 163.0 in March. The Expectations Index rose to 103.0 in April from 93.3 the prior month.


US Economy: GDP vs Labor Market

The growth rate of the American economy in the second quarter is estimated by the Atlanta Fed’s GDPNow model to be 1.3% annualized. That is just over one-third of its 3.2% pace in the first three months of the year and close to one-half its 2.2% pace in the fourth quarter of last year.

Despite the variation in GDP job creation remained healthy. Non-farm payrolls averaged 233,333,333 in the fourth quarter. The 185,666,667 average in the first quarter was dragged down by 56,000 in February. April produced 263,000 new positions and 190,000 are forecast for May.

Wages had even less alteration. The increase in annual average hourly earnings was 3.3% in the fourth quarter, 3.267% in the first three months of this year and 3.2% in April with the same forecast for May.

Unemployment dropped to a 50 year low of 3.6% last month making 14 months at or below 4%. That will become 15 months in May, the longest period for sub-4% unemployment since 1968 and 1969.


The employment components of the Institute for Supply Management purchasing managers’ indexes in manufacturing and services have been falling for most of the year suggesting that confidence among business managers is waning. But in the crucial test of current hiring, the job numbers belie the concerns. Businesses continue to seek and employ new workers.

For consumer attitudes the abstract notation of GDP and business executives’ future concerns are  far less important than the concrete facts of jobs and income.  


The Fed may strive to keep inflation “symmetric” around its 2% target. But for consumers consistent low inflation is an addition to disposable income.  Over the past ten months overall PCE annual inflation has fallen 0.9% from 2.4% last July to 1.5% in March. Whatever the economic virtue of the Fed’s price target declining inflation is a boon to consumers and another source of optimism.


Consumer Confidence

Considering the performance of the US economy over the last two years and the ascent of the labor market in particular it is not remarkable that consumer confidence scores have been the best in two decades and comparable to the strongest in the 52 year history of the Conference Board’s survey.

With the job market steadily producing more positions than there are workers to fill them with wages rising at the best pace in a decade and inflation quiescent, consumers are going to remain happy and confident as long as their paychecks tell them they are.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex Analysis

Editors’ Picks

EUR/USD: Off multi-month highs, holds above 1.1200 ahead of ECB

Amid a broad-based US dollar rebound, EUR/USD corrects further from three-month highs of 1.1257 ahead of the European open, as the bulls take a breather ahead of the key European Central Bank (ECB) monetary policy decision.


GBP/USD retreats from five-week top to sub-1.2600 area amid quiet session

GBP/USD snaps five-day winning streak to take U-turn from 100-day SMA, still above 1.2500. BOE’s Bailey tells banks to prepare for no-deal exit and downs the GBP. The US Dollar bounces off three-month low amid risk reset, pre-ECB moves.


Riots could assist US recovery by ending the economic paralysis

The US economy may be headed for a V-shaped recovery aided ironically enough by the demonstrations that have made nonsense of the continued social and business restrictions and the riots whose damage will require massive spending to repair.

Read more

Gold: Bounces back above $1,700 to keep buyers hopeful

Gold prices recover from immediate support line, 50-day SMA. The yellow metal’s failure to close below 50-day SMA, not to forget a six-week-old ascending support line keeps the buyers hopeful. Risk reset, cautious mood ahead of the ECB also favors the buyers.

Gold News

WTI retraces within an immediate triangle around $37.00

WTI seesaws near three-month high inside a two-day-old symmetrical triangle. The black gold rose to the highest since March 11 the previous day but MACD’s weakness dragged it back from $38.30.

Oil News

Forex Majors