U.S. Consumer confidence edged up in May, though not quite as much as analysts expected, suggesting a slow economic recovery in the months ahead.
The New York-based Conference Board said Tuesday that its Consumer Confidence Index rose to 109.8 this month from a revised 108.5 in April. Analysts were expecting a reading of 110.0.
The industry group's index, based on a monthly survey of some 5,000 U.S. households, is closely watched because consumer confidence drives consumer spending, which accounts for about two-thirds of the nation's economic activity.
"Consumers' upbeat mood about current business and labor conditions underscores the economy's continuing recovery," said Lynn Franco, director of the Conference Board's research center.
But the numbers, which fell slightly below expectations, "suggest that the pace of economic growth will not accelerate in the months ahead," she said.
The index compares results to its base year, 1985, when it stood at 100. The May figure falls slightly below the seven-month high of 110.7 reached in March after confidence had tumbled following the Sept. 11 attacks.
Consumers opened their pocketbooks and wallets wider in April and increased their spending by 0.5 percent. Incomes rose modestly.
The latest snapshot of consumer activity released by the Commerce Department Tuesday raised hopes that consumers — the economy's lifeblood — will continue to spend in the months ahead and help along the economic recovery.
Consumers, whose spending accounts for two-thirds of all economic activity in the United States, especially splurged last month on big-ticket items, such as cars. Low interest rates and discounts on a range of costly manufactured goods continue to motivate buyers.
Americans' incomes — including wages, interest and government benefits, went up 0.3 percent in April.
Tuesday's spending figure was a little weaker than many analysts were expecting, although the rise in incomes matched expectations.
Sales of U.S. existing homes surged — 7.0 percent in April on low interest rates and resilient consumer confidence, a national real estate trade association said Tuesday.
Sales of previously owned homes, the largest category of home sales, rose to a seasonally adjusted annual rate of 5.79 million units last month from an upwardly revised 5.41 million in March, the National Association of Realtors said.
April sales exceeded the expectations of analysts polled by Reuters, who had forecast a 5.40 million sales pace.
"The housing sector, which kept the economy afloat last year, will do so again this year," the realtors' chief economist David Lereah said.