WASHINGTON -- Consumer confidence surged this month to its highest level in more than five years as optimism increased about the state of the economy and its prospects for the rest of the year, according to a closely watched private barometer released Tuesday.
The Conference Board's Consumer Confidence Index jumped to 76.2 in May from the previous month's upwardly revised reading of 69. The figure exceeded analyst expectations of a more modest increase.
The last time the index was this high was in February 2008, at the start of the Great Recession.
The index now has risen two straight months after plunging in March amid concerns about the effect of tax increases that kicked in at the start of the year as well as the federal budget cuts known as sequestration.
"Back-to-back monthly gains suggest that consumer confidence is on the mend and may be regaining the traction it lost due to the fiscal cliff, payroll-tax hike, and sequester," said Lynn Franco, director of economic indicators at the Conference Board.
Economists believe that rising home prices and record highs on U.S. stock markets have boosted the outlook of consumers.
Consumers were more optimistic about the state of the recovery and the jobs market, according to the index.
The percentage of those saying business conditions were good increased to 18.8% this month, from 17.5% in April.
And the percentage of consumers who said jobs were plentiful rose to 10.8%, from 9.7%.
The outlook for the next six months also improved. The percentage of people expecting business conditions to improve jumped to 19.2%, from 17.2%, and those expecting more jobs during that period increased to 16.8%, from 14.3%.