If you’re feeling a bit better about your portfolio and investing outlook than you were in April, you are not alone.

In early 2025, there was a high level concern about weakness in “soft” data (ie: consumer and investor sentiment surveys). While this data is not as conclusive as “hard” data (actual measurable statistics and data sets), it remains of great importance as it can be a leading indicator of what’s to come.

A key report was released this week that indicated a notable rebound in consumer confidence. This remains important given the reliance of the US economy on consumer spending. Typically, the more optimistic and confident consumers feel, the more they spend and the better the economy will do. With one quarter of negative GPD growth in the books, and concerns over ongoing economic slowdowns and “pauses” due to tariffs, any evidence that growth may pick up is a welcome sight.

The report was the Consumer Confidence Index for May 2025. It printed a 98 in May, rising from 85.7 in April (and exceeding expectations of 87). On a normalized basis, this is the biggest upside surprise in 6 months.

Below is an excerpt from the report summary:

“Consumer confidence improved in May after five consecutive months of decline,” said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board. “The rebound was already visible before the May 12 US-China trade deal but gained momentum afterwards. The monthly improvement was largely driven by consumer expectations as all three components of the Expectations Index—business conditions, employment prospects, and future income—rose from their April lows. Consumers were less pessimistic about business conditions and job availability over the next six months and regained optimism about future income prospects. Consumers’ assessments of the present situation also improved.”

Notably, the proportion of consumers surveyed saying they think a US recession is coming in the next 12 months also declined from April. Overall, the survey showed meaningful progress in consumer confidence. Yet as we know, one month does not make (or break) a trend so the softer/sentiment data remains important to watch.

Interestingly, after last week’s investor sentiment survey showed bulls (those favorable on markets) overtaking bears (those negative on markets) for the first time in weeks, this flipped back in favor of the bears this week. However as you can see from the historical data below, we are well off the levels of bearish sentiment that dominated earlier in 2025.

There has always been – and will likely always be – a high correlation between how markets are doing and how investors feel about markets and their overall financial prospects. Meaning, when markets are rallying, most investors feel great about being invested and are happy about their financial picture. And conversely, when markets are falling, many investors feel terrible about most financial items (their portfolios, the economic outlook, ability to spend, their jobs, etc). Knowing this, it’s not all that surprising sentiment has improved after markets have rallied almost 20% off the lows. However,- no matter if these improvements in sentiments are expected (or not), rationale (or not), or sustainable (or not) – it sure is nice to see investors feeling better about things – at least for now.

Onward we go,