Consumer confidence edges up in May on improving job market

The Conference Board's consumer confidence index rose to 95.4 in May from 94.3 in April. Last month's reading had been sharp drop from March's 101.4. A year ago, the index stood at 82.2.

Consumers' assessment of current economic conditions improved, but their outlook for the next six months slipped. Their expectations for the job market improved, however. Consumers were more likely this month to say they planned to buy a car, home or major appliance within the next six months.

Employers added a healthy 223,000 jobs last month, up from a lackluster 85,000 in March. And the unemployment rate slid to 5.4 percent, lowest since May 2008, six months into the Great Recession.

Paul Ashworth, chief U.S. economist at Capital Economics, called the May improvement in confidence "a pleasant surprise given that other measures of confidence had weakened in response to the recent surge in gasoline prices." The University of Michigan's preliminary reading on May consumer sentiment, released May 15, dropped sharply. The university will issue a revised May number Friday.

Gasoline prices have soared since hitting a low $2.03 a gallon in late January. The average price of a gallon of regular unleaded gasoline is $2.74, up from $2.53 a month ago. Still, gas prices are well below the average $3.66 a gallon a year ago, according to AAA.