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Consumer confidence rose in May. According to analysts at Wells Fargo, the strong labor market supported those gains. They noted that both the present situation and expectations components of the index improved and that more consumers see jobs as plentiful.

Key Quotes:

“The Conference Board’s Consumer Confidence Index remained at a strong level in May, with both the present situation and expectations series rising modestly during the month. The index met expectations with a headline reading of 128.0, following a slight drop in April””which had previously been reported as a slight increase.”

“While consumer confidence rose in May, the survey predates the uncertainty surrounding June’s Korean summit and the recent concerns about Italy’s economy, which have unsettled the financial markets and may negatively impact confidence in late May and beyond.”

“Consumers remain upbeat about the present situation, as much of the increase in the index came from a more positive assessment of current conditions.”

“The proportion of consumers expecting their income to increase fell slightly from 21.8 percent to 21.3 percent, while those anticipating a decrease in income rose modestly. This may be affecting consumers’ plans to make large purchases over the next six months.”

“Consumers continue to adjust their expectations following several months of heightened stock market volatility. The share of respondents expecting stock prices to rise fell dramatically from January’s cycle high of 51 percent to 33.1 percent in April. Some of that drop, however, was recouped in May.”