Consumer confidence deteriorated further in May as weak business and job conditions coupled with growing pessimism about the short-term future further depleted consumers’ confidence in the overall state of the economy, The Conference Board reported today.
The Consumer Confidence Index fell to 57.2 — a 16-year low — down from 62.3 in April. The Present Situation Index registered 74.4, down from 81.9. The Expectations Index fell to 45.7, compared with 50 in April.
"Consumers’ inflation expectations, fueled by increasing prices at the pump, are now at an all-time high and are likely to rise further in the months ahead," Lynn Franco, director of The Conference Board Consumer Research Center, said in a statement. "As for the short-term outlook, the Expectations Index suggests little likelihood of a turnaround in the immediate months ahead."
Consumers’ appraisal of current conditions grew more pessimistic in May, with the percentage of those claiming business conditions are "bad" rising to 30.6 percent from 26.5 percent. Those who saw business conditions as "good" decreased to 13.1 percent from 15.4 percent last month.
Consumers’ assessment of the job market was also more downbeat. The percentage of consumers saying jobs are "hard to get" was virtually unchanged, 28 percent versus 27.9 percent in April. Those claiming jobs are "plentiful" declined to 16.3 percent from 17.1 percent.
Consumers’ short-term expectations weakened further in May. Consumers anticipating business conditions to worsen over the next six months increased to 33.6 percent from 27.4 percent, while those anticipating business conditions to improve increased slightly to 10.4 percent from 10.1 percent in April.
The outlook for the labor market was little changed, but remains pessimistic. The percent of consumers expecting fewer jobs in the months ahead declined moderately to 32.4 percent from 32.9 percent, while those anticipating more jobs was virtually unchanged, 8.7 percent versus 8.8 percent in April. The proportion of consumers expecting their incomes to increase declined to 13.4 percent from 15.5 percent.
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