U.S. consumer confidence declined slightly in May as gas prices remain high and inflation stays elevated, reported The Associated Press.
“The Conference Board’s consumer confidence index slipped 0.7 points to 93.1 in May, the first decline after three months of gains. The measure hasn’t fallen as much this year as other gauges of consumer attitudes, but it has been stuck at a low level since the pandemic. Before COVID-19, it regularly reached 130,” AP wrote.
Meanwhile another gauge of consumer sentiment released last week by the University of Michigan fell to a “record low” in May, as high costs of goods has worsened inflation, which is outpacing the average growth in paychecks, reducing most Americans’ purchasing power, AP reported.
The latest consumer confidence survey showed that confidence grew among households with incomes at or above $100,000, while it fell for most others.
“Consumer sentiment is mostly glum even as the economy is still growing and the unemployment rate has stayed low. Some economists argue that the gap reflects inequality in a ‘K-shaped’ economy, with higher-income Americans benefitting from rising stock prices and still spending while lower-income households struggle,” AP wrote.
“The prospect of higher prices and faster inflation continues to loom over confidence readings with many households taking a more cautious approach to purchases this year,” Ben Ayers, Nationwide senior economist, said.
However, AP found that Americans’ outlook on the job market worsened slightly. Research found that 18.6% of respondents said jobs were “hard to get,” the smallest percentage since October. The findings reflect the “low-hire, low-fire” job market that has made it harder for those out of work to obtain new jobs.
