A measure of consumer confidence has retreated along with their assessments of business and labor conditions.
The Conference Board reported its Consumer Confidence Index fell to 106.4 in May, down from a revised 108.6 in April. Components of the index tracking current conditions and the short-term outlook declined.
Lynn Franco, senior director of economic indicators at the Conference Board, said consumers don’t foresee the United States economy improving in the months ahead. “They do expect labor market conditions to remain relatively strong, which should continue to support confidence in the short run.”
Consumers also said they were less likely to purchase such big-ticket items as homes, cars and major appliances as well as go on vacations. Inflation and rising interest rates remain concerns, Franco said. “Looking ahead, expect surging prices and additional interest rate hikes to pose continued downside risks to consumer spending this year.”
The Conference Board bases its Consumer Confidence Index on the results of monthly household surveys. Economists monitor the index because consumer spending accounts for more than two-thirds of economic activity.
For May, less upbeat assessments of current business and labor conditions pulled the present situation component of the index down 3.3 points to 149.6.
The proportion of consumers responding to the survey upon which the May index was based who described business conditions as “good” rose three-tenths of a point to 21.1 percent. The share of those who said conditions were “bad” fell 1.5 points to 20.7 percent.
The proportion of consumers who said jobs were “plentiful” declined three points to 51.8 percent. The share of those who said jobs were “hard to get” advanced 2.4 points to 12.5 percent.
Less upbeat outlooks pulled the expectations component of the index down 1.5 points to 77.5.
The share of consumers who said they expect business conditions to improve over the next six months fell nine-tenths of a point to 17.7 percent. The proportion who said they anticipated worsening conditions rose 3.2 points to 24.9 percent.
The share of consumers who said they expect more jobs to become available edged up a tenth of a point to 18.5 percent. The proportion of those anticipating fewer jobs fell 1.1 points to 18.7 percent.
While 19 percent of consumers said they expect their incomes will increase, up 1.2 points, another 14.5 percent said they expect their incomes to decrease, up 1.3 points.