The Conference Board Consumer Confidence Index, which had declined slightly in April, fell further in May. The Index now stands at 64.9 (1985=100), down from 68.7 in April. The Expectations Index declined to 77.6 from 80.4, while the Present Situation Index decreased to 45.9 from 51.2 last month.
"Consumers were less positive about current business and labor market conditions, and they were more pessimistic about the short-term outlook,” said Lynn Franco, director of economic indicators at The Conference Board. “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."
Consumers’ appraisal of present-day conditions deteriorated in May. Those claiming business conditions are "bad" increased to 34.3% from 33.2%, while those saying business conditions are "good" decreased to 13.6% from 15.5%. Consumers’ appraisal of the job market was also less favorable. Those claiming jobs are "hard to get" increased to 41.0% from 38.1%, while those stating jobs are "plentiful" decreased to 7.9% from 8.4%.
Consumers have also grown less upbeat about the short-term outlook. Those expecting business conditions to improve over the next six months decreased to 16.6% from 18.5%. However, those anticipating business conditions will worsen decreased to 13.1% from 14.2%.