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Consumer confidence rebounded in May after five consecutive months of declines, jumping to 98 from a reading of 86 in April, with expectations for the future surging over 17 points to 72.8, still below the 80 level, which typically signals a recession ahead. Joining me now on this is Yelena Shulyatyeva, who's the Conference Board Senior US economist. Yelena, always a pleasure to grab some time with you here. Just take us into what we're ultimately seeing in terms of the consumers and what's driving the most recent readings as of right now.

Well, we saw a significant rebound from the deep from the depths that we observed over the last several months. Nonetheless, despite this rebound, which basically beat all the expectations and the consensus of economists, you know, we are only back to the low levels that we observed back in 2024. So, it's in the sense, it's only a partial rebound. So, the cutoff date for this particular survey, for the preliminary May reading was May 19th. So that means it doesn't include the period during which we heard that tariffs may go up on European goods and, what's probably more important, that tariffs may go up on components for Apple products. So 25% tariff on Apple products could be, you know, could make consumers feel a little bit less optimistic, but we'll see. So, also, what's interesting is that tariffs obviously was the driver behind the significant rebound. We split the sample on May 12th and what we saw is that we saw some improvement before that date, but there was a lot of improvement following the US-China trade deal.

And so, with that in mind, I was taking a look at the expectations index, which is essentially the outlook, the short-term outlook for income, business, labor market conditions, and that is at 72.8, remaining below this threshold of 80, which we know typically signals a recession ahead. Is that something that you were placing a high probability of and and how that is actually factoring as well through to the consumer mindset as they're assessing their own opportunities both in employment and how that trickles through to their spending?

Sure. The recession probability, we also ask consumers about that, uh, we saw a decline in consumers' assessment of a recession. Here at the Conference Board, we have not expected a recession either, you know, before the US-China trade deal was announced or, obviously, after that. Uh, we see a significant slowdown in economic growth towards the end of the year, but by no means a recession. I think what consumers are telling us is that they are concerned about tariffs, so there's no doubt about that. We see through in their writings, for example, but I think what they're telling us they are not so much concerned about the state of the labor market as much. So, they still have jobs and as long as long as they have jobs, they will continue to spend. Uh, we ask consumers some special questions in the survey this time, and one-third of them are telling us that, you know, they are putting aside some money so, for a rainy day, so to say, if they can. So, we could see a slowdown in consumer spending just because of that, not because their finances are bad or because, you know, they're losing jobs, but just because they are more concerned about the future. So another thing is that half of consumers are concerned about not being able to afford the goods that they would like to purchase.

And just lastly, while we have you here, does it seem like a lot of those purchases are being dramatically shifted? Whether whether that is the decision to go out and eat during a week or even the decision to to go on vacation or buy a larger purchase, a good like a car.

So, we saw declines in those things, but in the May survey, we saw a significant rebound in all across different goods and services. Consumers are entering the summer period with some optimism here, so let's hope that that will last.