WASHINGTON – U.S. consumer confidence slipped in May after hitting almost a four-year high in April.
The consumer confidence index fell to 103.2 in May from a revised 109.8 in April, the Conference Board said Tuesday. This is the lowest level since February.
The decline was not as sharp as expected. Economists had forecast the index to fall to 100.7, according to a survey conducted by MarketWatch.
Economists said higher gasoline prices were the culprit for the drop in confidence.
“Energy prices have not pulled back by much, and it looks like May consumption has been tepid,” said Steve Stanley, chief economist at RBS Greenwich Capital Markets.
In May, consumers were less optimistic about the future. The expectations index slipped to 83.7 in May from 92.3 in the previous month. It is now at its lowest level since October.
“Apprehension about the short-term outlook for the economy, the labor market and consumers’ earning potential has driven the expectations index down to levels not seen since the aftermath of the hurricanes last summer,” said Lynn Franco, director of the Conference Board’s consumer research center.
Consumers’ overall assessment of current conditions remained favorable, but eased in May. The present situation index fell to 132.5 in May from 136.2 in April.
The outlook for the labor market was also less optimistic.
Those expecting more jobs to become available in coming months dropped to 14.6 percent from 15.4 percent. Those expecting fewer jobs rose to 18.2 percent from 16.3 percent.
Expectations of inflation moved higher.
Consumer’s expectations for inflation 12 months ahead rose to 5.6 in May from 5.3 in April. This is the highest level since the hurricanes hit the Gulf Coast last year.
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