Consumer confidence rises unexpectedly in May as economy reopens

Finance news

Mic’Kale Smith, who works as a security guard but has had to take time off to care for her son during the coronavirus disease (COVID-19) outbreak, wears a face mask as she shops with her son Da’Mier at the Tiger Market in Oxon Hill, Maryland, May 20, 2020.

Jonathan Ernst | Reuters

Consumer confidence unexpectedly improved in May as the U.S. economy slowly restarted, according to data released Tuesday by The Conference Board. 

The business group’s consumer confidence index rose to 86.6 this month from 85.7 in April. Economists polled by Dow Jones expected consumer confidence of 82.3 in May. 

“Following two months of rapid decline, the free-fall in Confidence stopped in May,” Lynn Franco, senior director of economic indicators at The Conference Board, said in a statement. “Short-term expectations moderately increased as the gradual re-opening of the economy helped improve consumers’ spirits.”

As of Tuesday, all 50 states had reopened their economies to some extent.  

“However, consumers remain concerned about their financial prospects,” Franco added. “While the decline in confidence appears to have stopped for the moment, the uneven path to recovery and potential second wave are likely to keep a cloud of uncertainty hanging over consumers’ heads.”

Stocks rallied Tuesday as traders cheered the U.S. economy reopening. The S&P 500 broke above the psychological level of 3,000 for the first time since early March, and the Dow broke above  25,000 level for the first time since March 10. Stocks also increased bets on a potential coronavirus vaccine. 

Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world.