Consumer confidence edged down in May as views of current economic conditions settled back amid rising prices due to the war in Iran.
The Conference Board’s gauge of confidence decreased 0.7 points to 93.1 after an upward revision to the prior month, data released Tuesday showed.
The median estimate in a Bloomberg survey of economists was a reading of 92.
A gauge of present conditions fell 3.2 points to a three-month low while a measure of expectations for the next six months rose in May to 74.4.
The report adds to the evidence of growing anxiety among American consumers about the high cost of living. The recent spike in fuel prices is particularly challenging for lower-income households despite a largely stable labor market and few signs of broad layoffs.
Two-thirds of consumers reported cutting back on spending due to rising prices, the report showed. When asked how their spending habits had changed, many respondents reported buying fewer items, delaying expensive purchases and buying cheaper versions of the same item.
A separate measure of consumer sentiment, released last week by the University of Michigan, dropped to a fresh record low in May as long-term inflation expectations worsened notably and views about personal finances deteriorated.
“Consumer confidence edged downward in May as the inflationary impacts of the war in the Middle East intensified,” Dana Peterson, chief economist at the Conference Board, said in a statement.
At the same time, consumer spending has been resilient, partly helped by tax refunds. The Conference Board survey showed Americans expect more jobs to be available in the next six months. The group’s overall gauge of expectations rose to the highest level this year.
The share of consumers who said jobs were plentiful decreased to the lowest since 2021, and the share saying jobs were hard to get also moved lower. The difference between these two — a metric closely followed by economists to gauge the job market — edged down.
While a growing share of respondents expect their incomes to decrease in the coming months, a greater share expect them to rise — likely due to a boost from the stock market. Nearly 55% expect higher equity prices in the coming year, the largest share since the end of 2024, the report showed.
Buying plans for new cars, homes, and some major appliances declined, while vacation intentions improved slightly.
The survey period for the report was May 1-19.
Niquette writes for Bloomberg.
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