We received some upbeat news last week on consumer sentiment, as measured by the University of Michigan survey, but another view of consumer confidence released this morning by the Conference Board is painting a different picture.
The Consumer Confidence Index fell 5.2 points to 60.8 in May, signaling the many of us soured on the economy during May.
“A more pessimistic outlook is the primary reason for this month’s decline in consumer confidence. Consumers are considerably more apprehensive about future business and labor market conditions as well as their income prospects,” Lynn Franco, Director of the Conference Board Research Center said.
“Inflation concerns, which had eased last month, have picked up once again. On the other hand, consumers’ assessment of current conditions declined only modestly, suggesting no significant pickup or deterioration in the pace of growth.”
The Consumer Confidence Index tends to do a better job measuring our outlook about the labor market, versus the University of Michigan’s survey, which likely accounts for the differing views on sentiment last month.
Still, the unexpectedly large drop comes as a surprise to most economists. Growth has not stalled and consumer spending continues to rise, albeit at a slow pace.
But the housing market has been strained and weekly jobless claims have jumped in recent weeks.
We’ll get a better look at the labor market on Friday when May’s employment report is released.
A survey by Bloomberg reveals that analysts expected 210,000 new private sector jobs, down from 268,000 in April.
McDonald’s, however, is likely to account for at least 50,000 new jobs in May, as the leading fast-food franchise beefed up on staff at the end of April and early May.
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