The Conference Board's Consumer Confidence Index ® slipped to 102.3 in May from April's upwardly revised reading of 103.7. This month's reading was better than expected, exceeding the 99.0 forecast. The latest figure is the index's lowest reading in the past six months.
The Conference Board Consumer Confidence Index® fell in May to 102.3 (1985=100), down from an upwardly revised 103.7 in April. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—decreased to 148.6 (1985=100) from 151.8 last month. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—decreased slightly to 71.5 (1985=100) from 71.7. The Expectations Index has now remained below 80—the level associated with a recession within the next year—every month since February 2022, with the exception of a brief uptick in December 2022.
“Consumer confidence declined in May as consumers’ view of current conditions became somewhat less upbeat while their expectations remained gloomy,” said Ataman Ozyildirim, Senior Director, Economics at The Conference Board. “Their assessment of current employment conditions saw the most significant deterioration, with the proportion of consumers reporting jobs are ‘plentiful’ falling 4 ppts from 47.5 percent in April to 43.5 percent in May. Consumers also became more downbeat about future business conditions, weighing on the expectations index. However, expectations for jobs and incomes over the next six months held relatively steady. While consumer confidence has fallen across all age and income categories over the past three months, May’s decline reflects a particularly notable worsening in the outlook among consumers over 55 years of age.”
“Consumers’ inflation expectations remain elevated, but stable. Consumers in May expected inflation to average 6.1 percent over the next 12 months—essentially unchanged from 6.2 percent in April, though down substantially from the peak of 7.9 percent reached last year. Nonetheless, consumers continued to view inflation as a major influence on their view of the US economy. Plans to purchase homes in the next six months held steady in May at around 5.6 percent, but was still notably down from 6 to 7 percent in Q4 2022. Meanwhile, plans to purchase autos and big-ticket appliances ticked up somewhat compared to April.” Read more
Background on the Consumer Confidence Index
The Conference Board Consumer Confidence Index measures the consumers attitudes and confidence in the economy, business conditions, and labor market, with higher readings indicating higher optimism. The general assumption is that when consumers are more optimistic they will spend more and stimulate economic growth. However, if consumers are pessimistic then spending will decline and the economy may slow down. The index is based on a 5 question survey, with 2 questions related to present conditions and 3 questions related to future expectations. The survey began in 1967 and was conducted every two months but changed to monthly reporting in 1977, which is where our data begins.
