The Conference Board’s Consumer Confidence Index® increased to 102.0 (1985=100) in May, after three consecutive months of decline. The primary driver was consumer optimism over the current labor market. The Present Situation Index, which reflects consumers’ sentiment toward current business conditions and the labor market, increased to 143.1 from a downwardly revised 140.6. Consumers who stated that it was difficult to find a job decreased to 13.5% from 15.5% in April, while those who stated that jobs were "plentiful" decreased to 37.5% from 38.4%. The Expectations Index, which reflects consumers’ expectations for income, business, and labor market conditions over the next six months, rose to 74.6 from the upwardly revised figure of 68.8. A reading below 80 may indicate a possible recession in the near future.

The May release of the Federal Reserve’s Beige Book summary of economic conditions noted economic activity continued to expand from early April to mid-May. Two Districts reported no change in activity, while the majority reported minor or modest growth. Retail expenditures were flat to slightly higher, partly because customers were price sensitive. Automobile sales remained stagnant, while several Districts observed that some manufacturers were providing incentives to boost sales. High interest rates continued to constrain lending growth. Despite high interest rates both housing demand and single-family construction increased. Conversely the commercial real estate sector was seen as softening. Generally speaking, manufacturing activity was seen as flat to up, while two Districts reported declines. Outlooks were a bit more pessimistic overall, amidst indications of increased uncertainty and increased downside risks.

The Commerce Department’s second estimate on the first-quarter gross domestic product (GDP) growth reported the economy expanded at an annual rate of (+1.3%), down from the first estimate of (+1.6%), and the (+3.4%) registered in Q4. The update reflected downward revisions to consumer spending, private inventory investment, and federal government spending. Consumer spending, as measured by personal consumption expenditures rose (+2.0%), a downward revision of 0.5 percentage point. The personal consumption expenditures price index increased at a (+3.3%) annual rate, a downward revision of 0.1 percentage point. Excluding food and energy, core prices for personal consumption expenditures, a preferred measure of inflation by the Fed, rose (+3.6%), a downward revision of 0.1 percentage point.