NEW YORK — The Conference Board Consumer Confidence Index dipped 0.7 points to 93.1 in May, down from a revised 93.8 in April, as price increases tied to the war in the Middle East weighed on consumers.
The Present Situation Index, which reflects views of current business and labor market conditions, dropped 3.2 points to 121.2. The Expectations Index, covering short-term outlooks for income, business and jobs, rose 1.0 point to 74.4. The survey covered responses from May 1 through 19.
“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.”
Net views of current business conditions fell 2.8 percentage points to +1.4 percent. The labor market differential, the share saying jobs are plentiful minus those saying jobs are hard to get, slipped 0.6 points to +6.9 percent.
Expectations for business conditions six months ahead improved modestly, with 19.0 percent expecting improvement. Views on the labor market outlook also edged higher. Income expectations turned slightly more negative, with 13.7 percent anticipating a decline.
In Southern Maryland, the national dip aligns with local pressures from rising fuel prices. Maryland’s average regular gasoline price reached about $4.45 per gallon in early May, up sharply from earlier in the year amid global supply concerns linked to the Middle East conflict. Commuters in Calvert, Charles and St. Mary’s counties, many of whom travel daily to jobs in the Washington area or Annapolis, face added costs that can reduce disposable income for other spending. Local businesses, including those in agriculture, tourism and delivery services, report higher operating expenses that may influence hiring or pricing decisions.
Consumers’ 12-month inflation expectations ticked down but stayed elevated. Nearly half expected interest rates to rise over the next year. Write-in comments showed increased mentions of prices, oil and gas, as well as war and geopolitics.
Plans to buy big-ticket items over the next six months shifted somewhat toward “no,” though the share saying “yes” remained the largest response. Used-car buying plans continued to rise on a six-month basis. Homebuying expectations edged higher overall. Spending plans for services such as restaurants, streaming and personal care stayed among top priorities, while some discretionary categories saw mixed signals.
Travel plans for the next six months ticked up, with a continued preference for domestic destinations. Expected spending on hotels, airfare and related costs increased.
Special questions in the May survey showed two-thirds of consumers cutting back on overall spending due to rising prices. Most who cut back bought fewer items or delayed big purchases, though many planned to make those buys within six months. Top areas for economizing included clothing, hobby items and toys.
Views on a possible U.S. recession over the next 12 months grew slightly more pessimistic, with the share saying it is very or somewhat likely rising.
The monthly Consumer Confidence Survey is conducted online for The Conference Board by Toluna. Preliminary results are based on responses through May 19.
