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Consumer sentiment edged higher in May, a month after posting its largest decline in more than six years, as a growing number of states move to reopen their economies amid an apparent flattening of the coronavirus curve, according to the latest reading of the Investor’s Business Daily/TIPP Economic Optimism Index.
The index remains in pessimistic territory for the second month in a row, as Americans continue to grapple with the economic pain from the outbreak, which has prompted massive job losses and triggered the biggest quarterly decline in the nation’s GDP since the Great Recession.
The IBD/TIPP Economic Optimism Index increased by 1.9 points, or 4%, this month, to a reading of 49.7, following an 11.3% plunge in April, which marked the largest monthly drop since October 2013. The index is also coming off of its lowest point since November 2016, reflecting a hope among Americans that the worst of the coronavirus crisis might be over and the economy will soon bounce back. Still, the measure lingers below a reading of 50, indicating continued pessimism about economic conditions. Further highlighting the toll that the coronavirus outbreak has taken on consumer sentiment, close to half (49%) of Americans believe that the U.S. economy is currently in a recession, according to our survey.
