By Kitco News
Tuesday May 31, 2016 10:04
(Kitco News) -Growing global and domestic uncertainty appears to be weighing on U.S. consumers as confidence slips in May, according to the latest data from the Conference Board.
Tuesday, the board said that U.S. consumer confidence fell to 92.6, down from April’s reading of 94.7 and well below expectations. According to consensus forecasts, economists were expecting to see a slight gain to 96.1.
The report noted falling optimism for current conditions as well as for the medium term. The present situation index fell to 112.9 from April’s reading of 117.1; at the same time the expectations index fell to 79.0 from the previous reading of 79.7.
“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 consumer survey showed a slightly more pessimistic view of the labor market. Of the people surveyed, those claiming jobs are “plentiful” was relatively unchanged at 24.3 percent; however, those claiming jobs are “hard to get” increased from 22.8 percent to 24.4 percent.
Economists pay close attention to consumer sentiment because it could highlight future purchasing trends. Consumers who are optimistic about the economy will spend more, driving domestic economic growth; however they are more pessimistic they will save their money and pay down debt.
Although the data was disappointing, Royce Mendes, senior economist at CIBC World Markets, said that it won’t have much impact as the data remain in a sideways pattern.
“Overall, the slight disappointment in the headline number won't be enough to move markets much today,” he said.
Source:Kitco
