U.S. consumer confidence experiences a notable rebound!
In May 2025, U.S. consumer confidence experienced a notable rebound, breaking a five-month streak of declines. The Conference Board reported a 12.3-point increase in its Consumer Confidence Index, elevating it to 98 from April's 85.7—the lowest since May 2020 .
This resurgence in optimism is largely attributed to easing trade tensions. President Trump's administration implemented a 90-day pause on a 145% tariff on Chinese imports and reached agreements with the U.K. and the European Union to delay additional tariffs. These developments have alleviated fears of a recession and bolstered consumer sentiment .
The Expectations Index, reflecting consumers' outlook on income, business conditions, and the job market, surged by 17.4 points to 72.8. While this indicates improved confidence, it remains below the threshold of 80, often associated with potential recession risks .
Despite the positive shift, concerns persist. Job market perceptions have softened, with an increasing number of consumers viewing jobs as harder to obtain. Additionally, while inflation has shown signs of cooling—core prices rose 2.6% year-over-year in March, down from 3% in February—economists caution that existing tariffs could reignite inflationary pressures in the coming months.
Nonetheless, the current uptick in consumer confidence suggests a more optimistic economic outlook, potentially influencing increased spending on homes, vehicles, and vacations. However, the sustainability of this confidence will depend on ongoing trade negotiations and inflation trends.