The Conference Board Consumer Confidence Index, which had declined in April, continued its downward trend in May. The Index now stands at 57.2 (1985=100), down from 62.8 in April. The Present Situation Index decreased to 74.4 from 81.9. The Expectations Index declined to 45.7 from 50.0 in April.
Says Lynn Franco, Director of The Conference Board Consumer Research Center: "The Consumer Confidence Index now stands at a 16-year low (Oct. 1992, 54.6). Weakening business and job conditions coupled with growing pessimism about the short-term future have further depleted consumers' confidence in the overall state of the economy. 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. 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. Those claiming business conditions are "bad" rose to 30.6% from 26.5%, while those claiming business conditions are "good" decreased to 13.1% from 15.4% 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, 28.0% versus 27.9% in April. Those claiming jobs are "plentiful" declined to 16.3% from 17.1%.
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% from 32.9% , while those anticipating more jobs was virtually unchanged, 8.7% versus 8.8% in April. The proportion of consumers expecting their incomes to increase declined to 13.4% from 15.5%.