After reporting a modest drop in U.S. consumer confidence in the month of April, the Conference Board released a report on Tuesday showing a further deterioration in confidence in May.
The Conference Board said its consumer confidence index fell to 64.9 in May from a downwardly revised 68.7 in April. The drop surprised economists, who had expected the index to edge up to 69.7 from the 69.2 originally reported for the previous month.
With the unexpected decrease, the consumer confidence index fell to its lowest level since coming in at 61.5 in January.
The drop by the headline index reflected a deterioration in consumers' appraisal of current conditions as well as a less optimistic outlook for the next six months.
The report showed that the present situation index fell to 45.9 in May from 51.2 in April, as those saying conditions are "bad" rose to 34.3 percent from 33.2 percent and those saying conditions are "good" fell to 13.6 percent from 15.5 percent.
Consumers also had a less favorable appraisal of the job market, with those saying jobs are "hard to get" climbing to 41.0 percent from 38.1 percent and those saying jobs are "plentiful" slipping to 7.9 percent from 8.4 percent.
Additionally, the expectations index fell to 77.6 in May from 80.4 in April, with those expecting conditions to improve sliding to 16.6 percent from 18.5 percent. At the same time, consumers expecting conditions to worsen also dropped to 13.1 percent from 14.2 percent.
The Conference Board noted that the outlook for the labor market was also less positive, as those expecting more jobs in the months ahead fell to 15.8 percent from 16.9 percent and those expecting fewer jobs rose to 21.0 percent from 18.4 percent.
Meanwhile, the report also said that the proportion of consumers expecting an increase in their incomes improved to 15.2 percent in May from 13.9 percent in April.
Lynn Franco, Director of Economic Indicators at The Conference Board, said, "Taken together, the retreat in the Present Situation Index and softening in consumer expectations suggest that the pace of economic growth in the months ahead may moderate."
The consumer confidence data from the Conference Board is in stark contrast to a report released by Reuters and the University of Michigan on Friday, which showed their reading on consumer sentiment at a multi-year high.
The report showed that the consumer sentiment index for May was upwardly revised to 79.3 from the mid-month reading of 77.8. The upward revision surprised economists, who had expected the index to come in unchanged.
With the upward revision, the index came in well above the final April reading of 76.4 and is now at its highest level since October of 2007.
by RTT Staff Writer
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