Consumer confidence slid in May as ongoing war-related challenges put pressure on prices globally. The Conference Board Consumer Confidence Index revealed a dip of 0.7 points to 93.1 in May, down from an upwardly revised 93.8 in April.
“Consumer confidence edged downward in May as the inflationary impacts of the war in the Middle East intensified,” said Dana M. Peterson, chief economist at The Conference Board. “Consumer appraisals of current business conditions and the current labor market were moderately less positive compared to last month. This was somewhat offset by modest improvements in consumers’ expectations for business conditions and the labor market six months from now. Meanwhile, income expectations eased in May, as those anticipating less income rose.”
Among age groups, confidence ticked up for consumers ages 35-54 but trended downward for older and younger consumers, both month over month and on a six-month moving average basis. By income, confidence among higher-income groups trended upward on a six-month moving average basis. By generation, confidence improved for the Silent Generation, the oldest group, but was little changed or lower among other generations.
Economic concerns are also shifting consumers’ plans to buy big-ticket items over the next six months. The report revealed more consumers are shifting to “now” when asked if they will be making larger purchases. Exceptions remain among consumers planning to buy a new car.
Confidence among these buyers rose, as did homebuying expectations, which inched higher on a six-month rolling basis overall, as plans to buy existing homes rose, offsetting a small dip in newly built units. Spending plans for white goods, home furnishings and electronics eased slightly or were unchanged on a six-month moving average basis.
Travel intentions for the next six months ticked up in May, and consumers continued to favor domestic destinations over international travel. Overall expected spending on hotels, motels, airfare and train travel for personal trips increased in May, correlating with an uptick in vacation plans.
Overall, 19 percent of consumers expected business conditions to improve, down from 19.4 percent in April. Additionally, 20 percent of consumers expected their incomes to increase, up from 19.4 percent in April.
