WASHINGTON (AP) Americans views of the economy improved in May after five straight months of declines sent consumer confidence to its lowest level since the onset of the COVID-19 pandemic, largely driven by anxiety over the impact of President Donald Trumps tariffs.
The Conference Board said Tuesday that its consumer confidence index rose 12.3 points in May to 98, up from Aprils 85.7, its lowest reading sinceMay 2020.
A measure of Americans short-term expectations for their income, business conditions and the job market jumped 17.4 points to 72.8, but remained below 80, which can signal a recession ahead.
The proportion of consumers surveyed saying they think aU.S.recession is coming in the next 12 months also declined from April.
Trumps policies including massiveimporttaxes may have clouded the outlook for theeconomyand the job market, raising fears that the Americaneconomyis headed toward a recession.
However, Trump's tariff pullbacks, pauses and negotiations with sometradingpartners may have calmed nerves for the time being.
"The rebound was already visible before theMay 12US-Chinatradedeal but gained momentum afterwards, saidStephanie Guichard, senior economist atThe Conference Board.
Trump had initially imposed a stunning 145% tariff on most goods fromChina, but agreed to a 90-day pause for negotiations. TheU.S.also came to an agreement with the U.K earlier in May.
Over theMemorial Dayholiday weekend, Trump andEuropean Unionleaders announced that the president's 50% tariff onimportsfrom the E.U., which he announced Friday, are on hold until July 9. That announcement would not have impacted the Boards survey, which closed on May 19.
The Conference Board said the rebound in confidence this month was broad-based across all ages and income groups.
Consumers assessments of the presenteconomicsituation also improved, with the exception of their view on job availability, which weakened for the fifth straight month despite another strongU.S.jobs report.
However, less than 25% of respondents said they were worried about losing their jobs, compared with the 50% of respondents who said they were concerned about not being able to buy the things they need or want.
The Labor Departmentearlier this month reported thatU.S.employers added a surprising 177,000 jobs in April and theunemploymentrate remained at a low 4.2%.
Write-in responses to the survey showed that tariffs are still consumers biggest concern. Inflation is also still weighing on their minds, though some noted that inflation seemed to be easing, along with gas prices.
Earlier in May, theCommerce Department reported that consumer prices rose just 2.3% in March from a year earlier, down from 2.7% in February. Excluding the volatile food and energy categories, core prices rose 2.6% compared with a year ago, below Februarys 3%. Economists track core prices because they typically provide a better read on where inflation is headed.
Gas prices have hovered around$3.17per gallon this month, down from$3.59a year ago, but up a few pennies from April.
The slowdown in inflation could be a temporary respite until the widespread duties imposed by Trump begin to push up prices in many categories. Most economists expect inflation to start ticking up in the coming months.
Robert Frick, an economist withNavy Federal Credit Union, said that while the tariff rollbacks may have boosted Americans' confidence this month, that optimism may be fleeting.
When prices start rising from existing tariffs in a month or two, it will be a sobering reminder that a new inflation fight has just begun, Frick said.
The Board's survey Tuesday also showed that Americans' plans to spend on homes, cars and vacations also increased from April, with significant gains coming after theMay 12China tariff pause.
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Source: https://www.floridarealtors.org/news-media/news-articles/2025/05/us-consumer-confidence-rebounds
