The consumer confidence bounced higher in May but households are skeptical regarding the outlook of short-term income despite anticipating job growth to resume in a strong manner that could have an impact on the consumer spending. The consumer confidence index climbed by 2.4 points to 128.0 this month from a downward revision of 125.6 in April where the result reached 128.7 last month, according to the Conference Board on Tuesday. If the consumers won’t spend more, the growth outlook may lean on the weaker side this year for disappointment, as commented by the chief economist of MUFG, Chris Rupkey, in New York. The U.S. financial markets moved slightly because of the data despite worsening crisis in Italy. The greenback increase to a 10-month high against the euro, while U.S. Treasury yields declined. Stocks on Wall Street also fell and both the S&P 500 and Dow Jones Industrial Average are closing to three-week lows. The labor market differential of the conference board rose to 26.6 as the best reading since May 2001 based on the data of respondents regarding the difficulty of landing a job compared to the 22.7 in April. The labor market slacks off because of the unemployment rate on the Labor Department data, signifying an improvement in the labor market. However, consumers were less optimistic about their short-term income prospects. Percentage of consumers expecting an improvement in their income dropped to 21.3 this month from 21.8 percent in April while those anticipating a decrease grew to 8.2 percent this month from 7.9 percent in April. Meanwhile, the house price inflation is driven by an acute shortage of houses for sale which affects the housing market negatively.
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