US consumer confidence dropped in May to the lowest since February, underscoring the impact of decades-high inflation on Americans’ economic views.
The Conference Board’s index decreased to 106.4 from an upwardly revised 108.6 reading in April, data out Tuesday showed. The median forecast in a Bloomberg survey of economists called for a decline to 103.6.
The figures suggest that persistently high inflation, particularly in categories like food and energy, is weighing on household sentiment and straining budgets. That’s forcing more Americans to dip into savings and load up their credit cards to support spending.
Consumers expect prices to rise at a still-elevated 7.4% rate in the next year, the report showed. Plans to buy automobiles, homes and appliances all declined in May.
“Indeed, inflation remains top of mind for consumers, with their inflation expectations in May virtually unchanged from April’s elevated levels,” Lynn Franco, senior director of economic indicators at The Conference Board, said in a statement.
“Looking ahead, expect surging prices and additional interest rate hikes to pose continued downside risks to consumer spending this year,” she said.
