US consumer confidence index wanes to 102.3 in May 2023

The US consumer confidence index decreased in May 2023 from an upwardly revised 103.7 in April to 102.3 (1985=100). The present situation index, which is based on consumers' assessments of the current state of the economy and labour markets, dropped from 151.8 to 148.6 (1985=100) last month. The expectations index, which measures consumers' short-term expectations for business, employment, and income circumstances, fell marginally from 71.7 to 71.5 (1985=100). According to the Consumer Confidence Survey conducted by IT corporation The Conference Board, the expectations index has now been below 80—the threshold linked with a recession within the next year—each month since February 2022, with the exception of a tiny rise in December 2022. Consumers' opinions of the business environment somewhat improved in May, but they were less optimistic about the labour market. Consumers assessed the conditions as "good" by 19.6 percent, up somewhat from the 17.0 percent who said they were "bad." However, the percentage of respondents who said jobs were "plentiful" fell to 43.5%, and the percentage of respondents who said employment were "hard to get" rose to 12.5%. Consumer views for the future remained negative for business conditions but marginally positive for the labour market. Short-term income prospects for consumers marginally improved, with a modest increase in those anticipating an income boost. The Conference Board's Ataman Ozyildirim, senior director of economics, stated: "Consumer confidence decreased in May as consumers' views of the current situation became slightly less cheerful while their prospects remained dismal. The most notable decrease in their evaluation of the state of the labour market was the percentage ofConsumers' perceptions of 'plentiful' employment declined 4 percentage points from 47.5 to 43.5 in May. The expectations index was impacted by consumers' worsening outlook on future business circumstances. However, projections for employment and earnings for the upcoming six months remained mostly unchanged. While consumer confidence has declined over the past three months across all age and income groups, May's decrease is particularly noticeable because it represents a worsening of the outlook among consumers over the age of 55. "Consumers' expectations for inflation are still high yet stable. Inflation expectations among consumers in May were largely unchanged from April's estimates of 6.2 percent and 6.1 percent, respectively, although far lower than the peak of 7.9 percent seen last year. However, consumerscontinued to view inflation as a major influence on their view of the US economy. Plans to purchase homes in the next six months held steady in May at around 5.6 per cent, but was still notably down from 6 to 7 per cent in Q4 2022.”