[ "WASHINGTON (AP) — U.S. consumer confidence slipped a modest 0.7 point to 93.1 in May, the first decline in three months of gains, despite a stock market that shrugged off worries and leapt toward record highs.
The Conference Board’s consumer confidence index fell 0.7 points to 93.1 in May, the first downside move after a streak of three months of upside. The figure hasn’t moved as sharply as other gauges of consumer mood this year, but it’s been trapped in the 90s since the pandemic, well below the 130 level that was typical before 2020.
A separate gauge released last week by the University of Michigan – the most widely watched consumer sentiment index – plunged to a record‑low 44.8 this month, its third straight decline. Rising gas and food prices have driven an “inflation shock” that outpaces wage growth, tightening purchasing power for most households.
Amazon‑style dashboards of the forecast “K‑shaped” economy claim higher‑income families are riding the rally: stock values jump while payrolls keep pace. But lower‑income households see lower wage growth and increasing basic costs, which has put a strain on their budgets.
Gas prices have cracked the $4.50‑per‑gallon mark for almost the entire month of May, having risen from $2.98 just before the war in Iran at the end of February. With above‑4‑level fuels, consumers are taking a cautious tone – the conference survey found that two‑thirds of respondents are trimming their spending.
The special questions this month unveiled that most Americans are cutting back on discretionary purchases – jeans and shoes, hobby kits and toys – amid a general “slow‑to‑pay” mindset.
Inflation shot to 3.8% in April, the highest in three years and above the Federal Reserve’s 2% target. Rising grocery costs cut through wallets, while beef prices spiked due to dwindling herds hampered by drought.
The up‑turn in the stock market, led by a climb in oil and tech stocks, is likely to look to the horizon for a peace‑time war in Iran. Yet consumer spender sentiment points to a very different present reality.
The fear of more inflation and a tighter job market is shown by the University of Michigan consumer sentiment index. In April, retail sales adjusted for inflation actually fell, while average hourly earnings adjusted for price changes shrank for the first time in three years.
Ben Ayers, a senior economist at Nationwide, commented that “the prospect of higher prices and faster inflation continues to loom over confidence readings.” He added that better future growth expectations might hint at a hopeful end to the Iran conflict.
Where safety nets turn uncertain, the First Measure of Low Income Work (F-MIW) of the May study converged to reveal that job prospects seemed greener than before – only 18.6% said “jobs were hard to get,” the lowest percentage since October.
With gas spending up and expected price increases for months, many Americans are treading carefully. As the incurred gap between the soaring stock market and the widening affordability of everyday goods grows, the K‑shaped divide may widen.
This month’s report – and the new special questions that are joined — offers a critical snapshot of the ongoing erosion of consumer confidence amid the inflationary spike, a stark counterpoint to the renewed optimism in the equities arena." ]
The Conference Board’s consumer confidence index fell 0.7 points to 93.1 in May, the first downside move after a streak of three months of upside. The figure hasn’t moved as sharply as other gauges of consumer mood this year, but it’s been trapped in the 90s since the pandemic, well below the 130 level that was typical before 2020.
A separate gauge released last week by the University of Michigan – the most widely watched consumer sentiment index – plunged to a record‑low 44.8 this month, its third straight decline. Rising gas and food prices have driven an “inflation shock” that outpaces wage growth, tightening purchasing power for most households.
Amazon‑style dashboards of the forecast “K‑shaped” economy claim higher‑income families are riding the rally: stock values jump while payrolls keep pace. But lower‑income households see lower wage growth and increasing basic costs, which has put a strain on their budgets.
Gas prices have cracked the $4.50‑per‑gallon mark for almost the entire month of May, having risen from $2.98 just before the war in Iran at the end of February. With above‑4‑level fuels, consumers are taking a cautious tone – the conference survey found that two‑thirds of respondents are trimming their spending.
The special questions this month unveiled that most Americans are cutting back on discretionary purchases – jeans and shoes, hobby kits and toys – amid a general “slow‑to‑pay” mindset.
Inflation shot to 3.8% in April, the highest in three years and above the Federal Reserve’s 2% target. Rising grocery costs cut through wallets, while beef prices spiked due to dwindling herds hampered by drought.
The up‑turn in the stock market, led by a climb in oil and tech stocks, is likely to look to the horizon for a peace‑time war in Iran. Yet consumer spender sentiment points to a very different present reality.
The fear of more inflation and a tighter job market is shown by the University of Michigan consumer sentiment index. In April, retail sales adjusted for inflation actually fell, while average hourly earnings adjusted for price changes shrank for the first time in three years.
Ben Ayers, a senior economist at Nationwide, commented that “the prospect of higher prices and faster inflation continues to loom over confidence readings.” He added that better future growth expectations might hint at a hopeful end to the Iran conflict.
Where safety nets turn uncertain, the First Measure of Low Income Work (F-MIW) of the May study converged to reveal that job prospects seemed greener than before – only 18.6% said “jobs were hard to get,” the lowest percentage since October.
With gas spending up and expected price increases for months, many Americans are treading carefully. As the incurred gap between the soaring stock market and the widening affordability of everyday goods grows, the K‑shaped divide may widen.
This month’s report – and the new special questions that are joined — offers a critical snapshot of the ongoing erosion of consumer confidence amid the inflationary spike, a stark counterpoint to the renewed optimism in the equities arena." ]
