Consumer Confidence down in May
Economy's short-term outlook shaky
-- Casual Living, 6/5/2006 6:41:00 AM
The Conference Board Consumer Confidence Index, which had increased in April, declined in May to 103.2, down from 109.8 in April.
The Present Situation Index also decreased to 132.5 from 136.2, while the Expectations Index fell to 83.7 from 92.3.
"Consumer confidence, which reached a four-year high in April, lost ground in May,” said Lynn Franco, director of the Board's Consumer Research Center. "Apprehension about the short-term outlook for the economy, the labor market and consumers’ earning potential has driven the Expectations Index down to levels not seen since the aftermath of the hurricanes last summer. In sharp contrast, consumers continue to rate current conditions favorably, although the Present Situation Index also lost ground this month. Looking ahead, the Expectations Index bears close watching, as it is often a harbinger of times to come."
Consumers’ overall assessment of current conditions eased but remains favorable. Consumers claiming conditions are “good” declined to 28.0% from 29.7%. Those claiming conditions are “bad” edged up to 15.4% from 15.1%. Labor market conditions were also less favorable. Those saying jobs are “plentiful” decreased to 28.6% from 29.4%, while those claiming jobs are “hard to get” increased to 20.5% from 19.7%.
Consumers’ outlook for the next six months, which improved moderately in April, turned pessimistic in May. Those expecting business conditions to worsen increased to 13.2% from 9.3%. Those expecting business conditions to improve decreased to 16.5% from 17.3%. The outlook for the labor market was also less optimistic.
Those expecting more jobs to become available in the coming months decreased to 14.6% from 15.4% in April. Those expecting fewer jobs rose to 18.2% from 16.3%. The proportion of consumers anticipating their incomes to increase in the months ahead declined to 16.6% from 18.0%.
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS, one of the world’s largest custom research companies. The cutoff date for May’s preliminary results was May 23.
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