EmailThe Conference Board’s Consumer Confidence Index fell 3.8 points from a downwardly revised 68.7 (from 69.2) in April to 64.9 in May. That was the third consecutive decline in confidence. The Briefing.com consensus expected consumer confidence to increase to 69.4. The present situation index fell from 51.2 in April to 45.9 in May while the expectations index dropped from 80.4 to 77.6.
The drop in consumer confidence was in direct contrast to the final reading of the University of Michigan Consumer Sentiment Index for May, which has steadily improved each month since August 2011 and now stands at its highest point since October 2007. The fall in confidence is likely the result of weakening job prospects. Consumers’ appraisal of the job market weakened considerably in May. This offset positive trends in gasoline prices. The drop in confidence should not be seen as an indicator of weaker consumption growth. Consumption is reliant upon income gains. Steady, albeit slower than we hoped, gains in payrolls will keep consumption levels trending higher.
