Consumer confidence fell in May as Americans, particularly older ones, became more pessimistic about the labour market, on top of elevated anxiety over inflation.
The board’s expectations index – a measure of consumers’ six-month outlook for income, business and labour conditions – inched down to 71.5 this month from 71.7 in April. Consumer spending, which makes up about 70 per cent of U.S. economic activity, has remained strong despite the Federal Reserve raising interest rates 10 straight times since March of last year in its effort to cool the economy and bring down persistent, four-decade high inflation.
The Conference Board noted that consumers’ assessment of current employment conditions saw significant deterioration, even as the labour market remains resilient in the face of rising rates.