U.S. consumer confidence surged in May, with the temporary suspension of tariffs boosting expectations.

The latest data released by the World Federation of Large Enterprises shows that in May, the US consumer confidence index rebounded significantly to 98.0 points (based on 1985 as the base year at 100), an increase of 12.3 points from April's 85.7 points, ending a five-month downward trend and indicating a significant improvement in consumer sentiment towards the overall economic situation. This increase in consumer confidence is not only reflected in the assessment of the current economic situation, but also in expectations for the future. The "present situation index" measuring consumer perceptions of the current business environment and job market rose by 4.8 points to 135.9, while the "expectations index" reflecting consumer expectations for income, business activities, and labor market in the next six months surged by 17.4 points to 72.8, although still below the threshold of 80 which usually indicates the risk of economic recession, it is significantly warmer than in April. Stephanie Guichard, Senior Economist of the Conference Board Global Indicators, pointed out that the increase in confidence was already evident before the US announced tariffs on some Chinese imports on May 12, and the announcement further boosted consumer confidence. She stated that the overall improvement in May was mainly driven by three core components of the expectation index, with consumers rebounding from the low points of the previous month in their views on the future business environment, job opportunities, and personal income. Data shows that consumers are no longer as pessimistic about the economy and job market in the next six months as they were in April, and have regained confidence in income growth. Meanwhile, perceptions of the current economic situation have improved slightly, especially in terms of business conditions. However, while consumers believe that the business environment has improved, their assessment of the current job market has weakened for the fifth consecutive month, reflecting ongoing concerns about the labor market. The recovery in confidence is evident across all age and income groups, and consumers of different political affiliations have also shown consistent improvement, with the confidence of Republican consumers rebounding most significantly. However, due to continuous declines in previous months, the confidence levels of all groups have not fully returned to previous levels, according to the six-month rolling average. With the continued recovery of the US stock market in May, consumer expectations for future stock prices have also improved. 44% of consumers expect stock prices to rise in the next 12 months, significantly higher than the 37.6% in April, while the proportion expecting a price drop has decreased from 47.2% in April to 37.7%. This is one of the most obvious indicators in the survey influenced by the progress of US-China trade talks on May 12. In open-ended questions about economic views, tariffs remain one of the most concerning topics for consumers. Many expressed concerns that tariffs could raise prices and have negative economic impacts, while some expressed hopes that progress in trade negotiations could drive economic growth. While high inflation and price issues remain major focus points, some consumers have noticed positive signs such as easing inflation and a decrease in gasoline prices. Consumers' assessment of their own family financial situation improved in May, showing optimistic sentiment in both the current situation and future expectations. The proportion of consumers expecting the US to enter an economic recession in the next 12 months also decreased. Although these data are not included in the calculation of the consumer confidence index, they still reflect changes in consumer attitudes towards the economic outlook. Meanwhile, consumers' expectations for future interest rates remain relatively unchanged, and the average 12-month inflation expectation has decreased from 7% in April to 6.5%. In terms of specific consumer behavior, willingness for large expenditures has shown significant growth. Compared to April, there were increases in plans for home buying, car purchases, and vacation planning in May, with a more significant increase in survey samples after May 12. Plans to purchase high-value items such as household appliances and electronics have also increased. In addition, consumer willingness to spend on service projects has generally strengthened, covering almost all service categories, with dining out still the most popular consumer choice, followed by streaming subscription services. Consumer willingness to spend on movies, theaters, live entertainment, and sports events has seen the largest increase compared to April. The survey also specifically asked consumers if they had recently adjusted their spending and financial behavior. The results showed that 36.7% of consumers said they were saving for future expenses, 26.6% said they had used savings to pay current expenses, and 26% postponed important consumption decisions. There were significant differences between high-income and middle-to-low-income groups in this regard - households with incomes above $125,000 were more inclined to save, while middle-to-low-income households were more likely to use savings or delay purchases. Additionally, only 19% of consumers said they were speeding up their spending to avoid future tariff impacts, but this proportion rose to 26% among high-income groups. In assessing future risks, consumers expressed more concern about being unable to afford basic needs or desired goods than about unemployment. Nearly half of consumers expressed concerns about not being able to afford necessities or desired items in the future, while fewer than one quarter expressed worries about losing their jobs. In terms of specific data, the proportion of consumers in May who considered the business conditions "good" was 21.9%, higher than April's 19.2%; the proportion who considered them "bad" decreased from 16.3% to 14%. The proportion of consumers who believed job opportunities were "plentiful" slightly increased to 31.8%, but the proportion who thought they were "hard to get" also increased to 18.6%. Looking ahead to the next six months, 19.7% of consumers expected business conditions to improve, higher than last month's 15.9%; the proportion expecting them to worsen decreased from 34.9% to 26.7%. The proportion of consumers expecting job opportunities to increase rose from 13.9% to 19.2%, while the proportion expecting job cuts decreased from 32.4% to 26.6%. At the same time, the proportion expecting future income to increase rose to 18%, while the proportion expecting a decrease in income decreased to 13.8%.