According to The Conference Board Consumer Confidence Index study, consumer confidence declined in May after slipping in April. However, the United States Commerce Department indicated that consumer spending increased its pace in the spring, with its personal consumer expenditure reading up 1% in April after coming in flat for March.
The Conference Board stated that its index now stands at 92.6 with 100 being the point at which consumers generally expect a strong economic performance. That rating fell from 94.7 in April. The Present Situation Index, reflecting assessments of current prospects, slipped from 117.1 to 112.9, while the Expectations Index of future prospects slid from 79.7 to 79 in May.
“Consumer confidence declined slightly in May, primarily due to consumers rating current conditions less favorably than in April,” said Lynn Franco, director of economic indicators at The Conference Board. “Expectations declined further, as consumers remain cautious about the outlook for business and labor market conditions. Thus, they continue to expect little change in economic activity in the months ahead.”
The gain in consumer spending was the greatest monthly increase in more than six years, observers noted. According to the Commerce Department Bureau of Economic Analysis, personal income increased 0.4% in April while disposable personal income increased 0.5%.