Consumer confidence dipped slightly in May as the inflationary effects of the ongoing war in the Middle East continued to weigh on households, according to a monthly survey from The Conference Board released Tuesday.
The research group said its Consumer Confidence Index fell 0.7 points to 93.1 in May, down from an upwardly revised 93.8 in April. The result came in above the 92.0 reading economists had expected.
The Present Situation Index — which tracks consumers’ assessments of current business and labor market conditions — retreated 3.2 points to 121.2. The Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, rose one point to 74.4.
Consumers grew somewhat less positive about the labor market, with the share saying jobs are “plentiful” falling to 25.5 percent from 26.9 percent in April. The labor market differential — the gap between those calling jobs plentiful and those calling them hard to get — ticked down 0.6 percentage points to 6.9 percent.
Confidence fell for both Republicans and Democrats but ticked up for independents.
Consumers’ write-in responses increasingly cited prices, oil and gas costs, and geopolitical conflict as concerns, the Conference Board said, with references to war and the Middle East remaining elevated for a second consecutive month.
Two-thirds of consumers reported cutting back on spending due to rising prices, with most buying fewer items or delaying expensive purchases. Spending plans increasingly favored necessities and low-cost discretionary items over big-ticket goods.
Expected inflation over the next 12 months ticked down and consumers said they expect the stock market to continue to rise. Interest rates are also expected to rise.
The Conference Board data follows a University of Michigan survey earlier this month that showed consumer sentiment fell to a record low as inflation expectations worsened amid higher gasoline prices. The Michigan survey focuses more on household purchasing power and financial conditions, which are pressured by rising gas prices. The Conference Board’s measure focuses on the labor market and business conditions, which have held up during the war.
A clearer picture of price pressures is expected Thursday, when the Commerce Department releases its personal consumption expenditures price index — the Federal Reserve’s preferred inflation gauge.