The Conference Board Consumer Confidence Declines Sharply In May
The Conference Board Consumer Confidence Index, which had increased in April, declined 6.6 points in May to 103.2 (1985=100), down from 109.8 in April. The Present Situation Index decreased 3.7 points to 132.5 from 136.2. The Expectations Index fell 8.6 points to 83.7 from 92.3.
"Consumer confidence, which reached a four-year high in April, lost ground in May," says Lynn Franco, Director of The Conference Board Consumer Research Center. "Apprehension about the short-term outlook for the economy, the labor market and consumers' earning potential has driven the Expectations Index down to levels not seen since the aftermath of the hurricanes last summer."
Consumers' overall assessment of current conditions eased but remains favorable. Consumers claiming conditions are "good" declined to 28.0 percent from 29.7 percent. Those claiming conditions are "bad" edged up to 15.4 percent from 15.1 percent. Labor market conditions were also less favorable. Those saying jobs are "plentiful" decreased to 28.6 percent from 29.4 percent, while those claiming jobs are "hard to get" increased to 20.5 percent from 19.7 percent.
Consumers' outlook for the next six months, which improved moderately in April, turned pessimistic in May. Those expecting business conditions to worsen increased to 13.2 percent from 9.3 percent. Those expecting business conditions to improve decreased to 16.5 percent from 17.3 percent. The outlook for the labor market was also less optimistic. Those expecting more jobs to become available in the coming months decreased to 14.6 percent from 15.4 percent in April. Those expecting fewer jobs rose to 18.2 percent from 16.3 percent. The proportion of consumers anticipating their incomes to increase in the months ahead declined to 16.6 percent from 18.0 percent.