"Equity market strength and particularly job growth, that's really the key"
-David Sloan, senior economist at 4Cast Inc.
Confidence among consumers in the world's largest economy jumped more than initially was expected in May, reaching a five-year high, lifted by an increased optimism for hiring and business conditions. The Conference Board's measure of consumers' mood soared to 76.2, the strongest since February 2008, exceeding the highest estimate of a 70.7 reading and improving from previous month's figure of 69.0. The improvement is coincided with constantly rising property prices and stocks that reached all-time high. Moreover, the labour market is also healing, pushing consumers' confidence higher. As a result, further improvement in American's outlook is likely to encourage an increase in consumer spending, which accounts for around 70% of all economic output.
At the same time a gauge of consumer present conditions improved to 66.7 this month, hitting the highest since May 2008 and up from 61 a month earlier. A report also showed that a measure of economic expectations for the next six month soared to 82.4, from 74.3 in the preceding month.
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