Consumer Confidence Slows In May In Mixed Report

Consumer confidence slowed in May in what is, however, a mixed report that includes some positives. The headline index fell 2.1 points to a lower-than-expected 92.6 vs a revised 94.7 in April.

The assessment of the jobs market is mostly lower but not entirely. In a negative, those describing jobs as currently hard to get rose 1.6 percentage points to 24.4 percent but April's 22.8 percent was unusually low and a likely outlier. Looking at the future assessment of the jobs market, more see fewer jobs ahead, at 18.1 percent vs. April's 16.7 percent. But now the good news and that's modest improvement in future income expectations where optimists rose 4 tenths to 16.2 percent and remain well ahead of pessimists which are at 12.4 percent.

Buying plans are also a positive as more expect to buy a house within the next six months, up 7 tenths at 6.0 percent, and more expect to buy a car, up 8 tenths to 12.6 percent. Inflation did improve, up 1 tenth to 4.9 percent which is still low, however, for this particular reading.

Indications on consumer confidence are generally mixed such as this report and similar indications from the weekly consumer comfort index. Clearly on the positive side, however, has been the closely watched consumer sentiment index which, in last week's update, showed solid strength in May.

The bottom line, however, is whether the consumer is spending and, based on the latest home sales and this morning's personal income & outlays data, the answer is definitely yes. Watch tomorrow's calendar for vehicle sales and the first hard data on consumer activity in May.

Recent History Of This Indicator:
The University of Michigan's consumer sentiment index rose sharply in May and strength is also expected for the Conference Board's consumer confidence index which forecasters see rising 2.8 points to 97.0. An upward correction in the jobs-hard-to-get subcomponent, which fell sharply in April, could signal weakness for the May employment report.