US consumer confidence index declines
The Conference Board's Consumer Confidence Index, which had increased in April 2006, declined again in May 2006. The index now stands at 103.2 (where 1985 was 100), down from 109.8 in April.
At the same time, the 'Present Situation Index' decreased to 132.5 (from 136.2), while the 'Expectations Index' fell to 83.7 (from 92.3).
Today's consumer concerns Consumers' overall assessment of current conditions eased off a little, but still remains favourable, the survey suggested. Consumers claiming conditions are "good" declined to 28.0% from 29.7%, while those claiming conditions are "bad" edged up to 15.4% from 15.1%.
Labour market conditions were also less favourable, with those saying jobs are "plentiful" decreasing to 28.6% from 29.4%, while those claiming jobs are "hard to get" increased to 20.5% from 19.7%.
Future worries Consumers' outlook for the next six months, which improved moderately in April, turned pessimistic in May. Those expecting business conditions to worsen increased to 13.2% from 9.3%. Those expecting business conditions to improve decreased to 16.5% from 17.3%.
The proportion of consumers anticipating their incomes to increase in the months ahead declined to 16.6% in May (from 18.0% in April).
According to Lynn Franco, director of The Conference Board's Consumer Research Center, "Apprehension about the short-term outlook for the economy, the labour market, and consumers' earning potential has driven the expectations index down to levels not seen since the aftermath of the hurricanes of summer 2005. But, in sharp contrast, consumers continue to rate current conditions favourably. Looking ahead, the expectations index should be watched closely because it's often an indicator of times to come."
The consumer confidence survey is based on a representative sample of 5,000 US households, and is conducted every month for The Conference Board by TNS.