(Bloomberg) — Consumer confidence unexpectedly increased in May from a four-month low as Americans grew more sanguine about the economy and the labor market.
The Conference Board's index of sentiment advanced to 95.4 from a revised April reading of 94.3, the New York-based private research group said Tuesday. The median forecast of 68 economists in the Bloomberg survey called for 95.
Higher home values, near-record stock prices and a stronger labor market have helped stabilize confidence even in the face of rising gasoline prices. A sustained pickup in wage growth is probably needed to revive consumer spending after a first- quarter setback.
"While current conditions in the second quarter appear to be improving, consumers still remain cautious about the short- term outlook," Lynn Franco, director of economic indicators at the Conference Board, said in a statement.
Estimates in the Bloomberg survey ranged from 90 to 102.9. The Conference Board's gauge averaged 96.9 during the last expansion and 53.7 during the recession that ended June 2009.
Other data Tuesday showed orders for capital equipment climbed in April for a second month and home prices rose more than forecast in 20 U.S. cities in March. Bookings for non- military capital goods excluding aircraft, a proxy for future corporate spending on new equipment, advanced 1 percent after a 1.5 percent gain in March that was larger than previously estimated, according to the Commerce Department.
