Consumer confidence declines for fourth time in five months

Consumer confidence fell in May as Americans, partic- ularly older ones, became more pessimistic about the labor market, on top of ele- vated anxiety over inflation.

The Conference Board reported Tuesday that its consumer confidence index fell to 102.3 in May from 103.7 in April. It’s the fourth time in five months that overall consumer confidence has declined.

The business research group’s current situation index — which measures consumers’ assessment of current business and labor market conditions — fell to 148.6 from 151.8 last month.

The board’s expectations index — a measure of consumers’ six-month outlook for income, business and labor conditions — inched down to 71.5 this month from 71.7 in April.

A reading under 80 often signals a recession in the coming year. The Confer- ence Board noted that read- ing has come in below 80 every month but one since February 2022.

“While consumer confi- dence has fallen across all age and income categories over the past three months, May’s decline reflects a par- ticularly notable worsening in the outlook among consumers over 55 years of age,” said Ataman Ozyildirim, senior director of economics at the Conference Board.

Cons u mer spendin g, which makes up about 70% of U.S. economic activity, has remained strong despite the Federal Reserve raising interest rates 10 times since March of last year in its effort to cool the economy and bring down inflation.

Last week, the government reported that consumer spending jumped 0.8% from March to April. Much of the increase was driven by spending on new cars, which soared 6.2%.