Inflation expectations rise, U.S. consumer confidence index falls to 6-month low in May

U.S. consumer confidence fell to a six-month low in early May amid expectations of continued near-term inflation and rising concerns about the job market.

U.S. consumer confidence fell to a six-month low in early May amid expectations of continued near-term inflation and rising concerns about the job market.
Confidence fell to 67.4 in May from 77.2, according to preliminary data from the University of Michigan.
The figure was weaker than all forecasts by economists.
Data showed consumers expected prices to rise at an annual rate of 3.5% next year, the highest in six months, up from the 3.2% forecast in April.
Prices are expected to rise 3.1% over the next five to 10 years, a slight increase from a month ago.
Broad declines in confidence across age, income and education groups also reflect growing concerns about high interest rates.
While the labor market boosted economic growth last year, the pessimistic assessment highlighted in the report adds to evidence of a slowdown.
Joanne Hsu, director of the survey, said in a statement, \”Strong household incomes have been the main source of support for consumer spending over the past few years, so the expected weakness in the labor market is worrying; if this situation continues, it may lead to a pullback in consumers\’ willingness to spend. .
The University of Michigan\’s measure of conditions for purchasing some durable goods that require financing fell to its lowest point in a year.
\”What\’s worse is that consumers expect the pain to continue as interest rate expectations worsen sharply this month,\” Hsu said.
“Only a quarter of consumers expect interest rates to fall over the next year, compared with 32% in April.
” The current conditions indicator fell to 68.8; while the expectations indicator fell to 66.5; both were 6-month lows.
Consumers\’ views of their financial health and their short- and long-term economic prospects declined this month.
The confidence gauge also provides insight into how voters feel about the economy and finances ahead of November\’s presidential election.
Confidence among Democratic, Republican and independent voters worsened this month.
The latest data underscores President Joe Biden\’s lack of confidence among Americans that his policies will help the economy.

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