U.S. consumer confidence edged lower in May, with the Conference Board's index slipping to 93.1 from a revised April reading, as rising gasoline prices and concerns over the Iran conflict intensified inflationary pressures on households.
The decline came as the Present Situation Index fell 3.2 points to 121.2, signaling weakening assessments of current business and labor market conditions. However, the Expectations Index, which tracks the short-term outlook, rose modestly by 1 point to 74.4 — remaining below the 80-point threshold that historically warns of a potential recession.
Dana Peterson, chief economist at The Conference Board, said references to “prices and oil and gas increased in frequency for a second consecutive month” and that “war, geopolitics, and conflict remained elevated.” The labor market differential, a gauge of job availability, also narrowed to 6.9 as a smaller share of consumers viewed jobs as “plentiful.”
The data, combined with the University of Michigan’s consumer sentiment index dropping to a record low of 44.8 in May, highlights mounting anxiety among American households. With the Federal Reserve closely watching for signs that higher energy costs are filtering into broader inflation, investors now expect policymakers to remain cautious on interest rates, potentially delaying any easing cycle.
