Washington — US consumer confidence fell slightly this month as gas prices remained high and inflation remained elevated, a sharp contrast to rising stock prices. near record levels.
Conference Board Consumer confidence index It fell 0.7 points to 93.1 in May, the first decline after three months of gains. The measure has not fallen as much this year as other measures of consumer attitudes, but has been stuck at a low level since the pandemic. Before COVID-19, it regularly reached 130.
A separate measure of consumer confidence Released last week from the University of Michigan fell to a record low this month. Its high gas and food costs Inflation worsened This exceeds average salary growth, reducing the purchasing power of most Americans. Americans are angry about President Trump’s economic policies Polls showWhich could create problems for Republicans before the midterm elections.
Consumer sentiment is mostly bleak even as the economy and unemployment rate continue to grow He stayed down. Some economists believe that this gap reflects inequality in the world K-shaped economyWith higher-income Americans benefiting from rising stock prices and continuing to spend while lower-income families suffer.
A consumer confidence survey conducted Tuesday showed that confidence grew among households with incomes of $100,000 or more, while it declined for most other households.
“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,” said Ben Ayers, chief economist at Nationwide.
Ayers noted that there are some positive signs: Americans’ expectations for growth over the next six months have improved, which may be a sign that they expect the war with Iran to be over by then.
However, Americans’ labor market expectations worsened slightly. The percentage of respondents who said jobs are “plentiful” fell to 25.5%, the lowest percentage in three years. Meanwhile, just 18.6% said jobs are “hard to get,” the lowest percentage since October. The results reflect a “low-employment, low-fire” labor market that has made it difficult for the unemployed to get new jobs.
Gas prices rose to an average of $4.49 per gallon nationwide from $2.98 just before the war began at the end of February, and remained at or above $4.50 per gallon throughout almost all of May.
This month, the Conference Board added special questions to its survey, which found that rising prices have prompted most Americans to change their spending habits. Two-thirds of survey respondents said they would cut spending in response to the increases, with most cutting overall purchases and delaying more expensive acquisitions.
The survey found that many consumers also plan to economize on clothing, shoes, hobby items and toys.
Economic inflation jumped to 3.8% in April, the highest level in three years and well above the Federal Reserve’s 2% target. In addition to rising gas prices, grocery prices have also begun to rise more quickly, likely due to higher shipping costs. Beef prices also rose sharply, due to drought and other factors Cattle herds decline.
Higher prices reduce Americans’ average inflation-adjusted incomes. Average hourly wages, adjusted for price changes, contracted in April from a year earlier for the first time in three years.
Other data also suggests that consumers are becoming more cautious amid rising prices. Adjusted for inflation and retail sales It actually dropped in AprilAfter a strong rise in March.
The University of Michigan Consumer Confidence Index fell to a record low of 44.8 in May, the third straight decline, with a majority of survey respondents saying higher prices were hurting their personal finances.