Consumer confidence rebounded 12.3 points this month after a five-month decline, with buyers holding rosier outlooks on the current business climate and expectations for the next six months, according to the Consumer Confidence Index released Tuesday.
May’s bounce in confidence, which comes amid the Trump administration's efforts to broker trade deals with China and other countries after the president's sweeping tariff rollout last month, spanned all age groups, income levels and political affiliations, with the strongest improvements among Republicans, researchers at The Conference Board found.
American and Chinese officials announced a temporary truce on May 12 in their battle of escalating tariffs since Trump upped the tax on Chinese imports with his April 2 "Liberation Day" tariff plan.
The U.S. lowered its tariff rate on Chinese imports from 145 percent to 30 percent in the May agreement, and Beijing lowered its tax rate on U.S. goods from 125 percent to 10 percent. China also agreed to lift some nontariff retaliatory measures it had taken.
"The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards," economist Stephanie Guichard said in a statement on the latest Consumer Confidence Index. "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."
The survey's preliminary results reported Tuesday were collected through May 19, with about half coming after May 12.
The survey's Expectations Index, which is based on a six-month outlook for income, business and job market conditions, surged by nearly 17.5 points to 72.8, but remained below the 80-point threshold typically used to indicate the likelihood of avoiding a recession.
Analysts noted buyers "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 latest assessment found home and vehicle purchasing plans and vacation intentions have risen since April — particularly after the May 12 announcement. Planned spending also ticked up for pricey items such as appliances and electronics as well as services across all sectors.
Nearly 22 percent of consumers surveyed said business conditions were "good," compared to 19.2 percent in April, and 19.7 percent said they expect business conditions will improve over the next six months, up from 15.9 percent in April.
Eighteen percent of consumers said they expect their own incomes to increase in the next six months, up from 15.9 percent in April.