AP Business Writer, Matt Ott
WASHINGTON (AP) — Americans’ economic views improved in May after the fifth consecutive month’s decline reached a fifth consecutive month’s lowest level since the fifth consecutive month’s decline was driven primarily by fears over the impact of tariffs on President Donald Trump.
The conference committee said Tuesday that its consumer confidence index rose 98 points in ’98 from 85.7 in May.
The short-term expectations for Americans’ income, business conditions and job markets rose 72.8 points to 17.4 points, but fell below 80, indicating a recession.
The proportion of consumers surveyed that they believe the US recession is coming in the next 12 months has also fallen since April.
Trump’s aggressive and unpredictable policies, including massive import taxes, clouded the outlook for the economy and job markets, and raised fears that the US economy is heading for a recession.
But Trump’s tariff pullbacks, suspensions and negotiations with some trading partners could have calmed the nerves for the time being.
“The rebound was already visible before the US-China trade contract on May 12, but it gained momentum afterwards,” said Stephanie Gichard, senior economist at the conference committee.
Trump initially imposed a stunning 145% tariff on most items from China, but agreed to a 90-day suspension for negotiations. The US also signed an agreement with the UK at the beginning of May.
Over the Memorial Day holiday weekend, Trump and European Union leaders announced that the president’s 50% tariff on imports from the EU, which he announced on Friday, is pending until July 9th. The announcement did not affect the board’s investigation, which ended May 19th.
The conference committee said this month’s confident rebounds are extensively based across all age and income groups.
Consumers’ ratings of the current economic situation have also improved, but have been weakened for five months despite another strong US employment report, except for views on employment availability.
However, fewer than 25% of respondents said they were worried about losing their jobs, compared to 50% of respondents who said they were concerned about not being able to purchase what they need or what they need.
The Labor Bureau reported earlier this month that US employers added an astounding 177,000 jobs in April, leaving the unemployment rate still lower by 4.2%.
The posting response to the survey indicated that tariffs remained the biggest concern for consumers. He pointed out that inflation still weighs heavily on their minds, but inflation appears to be easing along with gasoline prices.
In early May, the Commerce Department reported that consumer prices in March the previous year had risen by just 2.3% from 2.7% in February. Excluding the volatile food and energy categories, core prices rose 2.6% compared to a year ago, below 3% in February. Economists usually track core prices to provide a better reading of where inflation is heading.
Gas prices have been around $3.17 per gallon this month, up from $3.59 this month, to around $3.17 per gallon this month, but it’s been a few pennies since April.
A slowdown inflation could be a temporary rest until the broader duties Trump has imposed begin to push prices up in many categories. Most economists hope that inflation will begin to tick off in the coming months.
Robert Frick, an economist with the Navy Federal Credit Union, said the tariff rollback may have boosted Americans’ confidence this month, but optimism may be fleeting.
“If prices start to rise from existing tariffs in a month or two, it’s a reminder that a new battle of inflation is just beginning,” Frick said.
A board survey on Tuesday showed plans to spend Americans on homes, cars and holidays also increased since April, showing that profits had risen significantly after the May 12 suspension of China rates.
Original issue: May 27, 2025 10:44am EDT
