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Other components, like business conditions, employment prospects, and future income, also rose in May. So, after consumer confidence declined for five straight months, the May resurgence is very hopeful for the summer, since consumers are now suddenly upbeat!

Costco Wholesale Corp. (COST)

Another good sign of consumer confidence is that Costco Wholesale Corp. (COST) announced its earnings on Thursday, with quarterly same-store sales rising 8%, which is a sign that consumer spending remains strong.

Since Costco is a major gasoline retailer, the fact that its same-store sales rose despite lower gasoline prices is an important signal. Costco will also be key to helping move the bloated inventory of goods that were “dumped” in the US in the first quarter in an effort to beat the coming US tariffs. The company has stockpiled many goods, such as patio furniture, with no price increases foreseen for the summer months.

All in all, the Commerce Department reported that personal spending rose only 0.1% in April after surging 0.7% in March. The data is not very inflationary, so the Federal Reserve has all the reasons it needs to cut key interest rates as soon as it can overcome its inflation fears.

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