The Conference Board Consumer Confidence Index increased in May—its third consecutive monthly gain—and now stands at 63.3 (1985=100), up from 57.7 in April, the Conference Board reported.

The Present Situation Index increased to 30.2 from 28.2 last month, while The Expectations Index improved to 85.3 from 77.4 last month—its highest reading since August 2007 (89.2).

"Consumer confidence...although still weak by historical levels, appears to be gaining some traction," said Lynn Franco, director of The Conference Board Consumer Research Center.

"Consumers' apprehension about current business conditions and the job market continues to slowly dissipate. Consumers' expectations, on the other hand, have increased sharply over the past three months, propelling the Expectations Index to pre-recession levels. The improvement has been fueled primarily by growing optimism about business and labor market conditions. Income expectations, however, remain downbeat."

Other findings:

• Consumers' assessment of current-day conditions continued to improve in May. Those saying conditions are "good" increased to 10.0% from 8.9% in April, while those saying business conditions are "bad" declined to 39.3% from 40.0%.
• Consumers' appraisal of the labor market was also more positive. Those claiming jobs are "hard to get" decreased to 43.6% from 44.8% last month, while those saying jobs are "plentiful" was virtually unchanged at 4.6%.
• Consumers' optimism about the short-term future was significantly better in May. The percentage of consumers expecting business conditions will improve over the next six months increased to 23.5% from 19.7% in April, while those expecting conditions will worsen declined to 11.5% from 12.4%.
• Consumers were also more confident about future job prospects. Those anticipating more jobs in the months ahead increased to 20.4% from 17.7% last month, while those anticipating fewer jobs declined to 17.7% from 19.9%. The proportion of consumers anticipating an increase in their incomes improved to 11.3% from 10.5%.

About the data: The Consumer Confidence Survey is based on a representative sample of 5,000 US households. The monthly survey is conducted for The Conference Board by TNS. The cutoff date for May's preliminary results was May 18.