Consumer confidence in May reached its highest level since October 2007, before the recession, according to a monthly report by Thompson Reuters and the University of Michigan. The report, The Consumer Sentiment Index , was at 79.3, up from 76.4 in April and 74.3 in May 2011.
The report cites more favorable job and wage prospects as the main factors behind the outlook, which has improved over the past nine months. It said record numbers of consumers said they heard of favorable employment trends, despite the recent hiring slowdown reported by the U.S. Department of Labor Statistics. Fewer consumers reported hearing of job losses in May than at any time since mid-2007, and most expected a modest gain in the economy.
"The most likely prospect is that job growth resumes at a modest pace and that confidence remains largely unchanged until after the November election and decisions about tax policy are made," said Surveys of Consumers Chief Economist Richard Curtin.
Few consumers mentioned the potential impact on the domestic economy that the European financial crisis could have.
Sixty-three percent of consumers had favorable views on buying conditions for household durables, the highest in more than a year. The report said that was driven by the availability of price discounts. Five of every seven middle-to-high income households, who are most likely to purchase vehicles, had favorable views of buying conditions. That amount was up from 67 percent in April and 57 percent a year ago.