This morning’s Consumer Confidence for May from the Conference Board came in above expectations and was an increase of 4.5 points. The Present Situation Index increased by 3.5 points and the Expectations Index increased by 5.8 points. However, the Expectations Index remains below 80, which the Conference Board considers a recession signal threshold.
While today’s report saw confidence improve after three straight months of decline, consumers remain anxious about the future. They cited high prices for food and groceries having the largest impact and expect inflation to remain high for the foreseeable future. Recession expectations have also made a resurgence, with more consumers believing a recession is ‘somewhat likely’ or ‘very likely’ over the next twelve months. The Present Situation Index remains below pre-pandemic levels and the Expectations Index has been consistently drifting lower. The Consumer Confidence Index has seen an overall downtrend since 2021 as consumers absorb today’s high prices for goods, services, and housing.
Weak Consumer Confidence and underlying indications of frugality are likely to have an impact on future spending, making a downturn all the more likely.
