The Conference Board’s Consumer Confidence Index fell from 68.7 in April to 64.9 in May, primarily due to a drop in the Expectations Index from 80.4 in April to 77.6 in May. The Present Situation index also declined from 51.2 in April to 45.9 in May.
In its announcement the Conference Board noted:
Consumers were less positive about current business and labor market conditions, and they were more pessimistic about the short-term outlook. However, consumers were more upbeat about their income prospects, which should help sustain spending. Taken together, the retreat in the Present Situation Index and softening in consumer expectations suggest that the pace of economic growth in the months ahead may moderate.
Some 34.3% of consumers view present business conditions as “bad” and only 13.6% see business conditions as “good”. Consumers also anticipate a slowing in job growth, with those who believe jobs will be “hard to get” totaling 41%. Those who thought jobs were “plentiful” totaled just 7.9%.
While job market sentiment is low, 15.2% of those surveyed expect a pay increase in the coming months, up from 13.9% in April’s survey.
Slow growth has been the hallmark of the US economy since early last year. Consumers don’t see or feel any substantial change in the short term and only very modest growth in the medium term. And who can blame them?