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US consumer confidence rose to 128.0 (Nomura: 130, Consensus: 128), 2.4pp above April’s downwardly revised 125.6 and the solid reading for May is consistent with the University of Michigan’s consumer survey that showed resilient optimism from consumers, explains the research team at Nomura.

Key Quotes

“The labor differential, the gap between those reporting jobs “plentiful” versus “hard to get,” increased 3.9pp to 26.6, the highest reading since March 2001, a good sign for Friday’s jobs data. However, buying plans moderated somewhat as the percent of respondents planning to buy a home within six months fell 1.4pp to 5.5%, the lowest reading since October 2016.”

“Other buying plans for major appliances and autos moderated. Inflation expectations (next 12 months) rose 0.3pp to 5.0%, the first 5% or higher reading since September 2016 and likely gas-price related. Taken altogether, yesterday’s data are consistent with our optimistic consumer outlook, particularly with respect to the labor market. However, buying plans over the next few months should be worth monitoring.”