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U.S. consumer confidence fell slightly in May for the first time this year as Americans were less optimistic about future job and income prospects.
The Conference Board’s index was little changed at 117.2, from a downwardly revised 117.5 reading in April, according to a Tuesday report. The median estimate in a Bloomberg survey of economists called for a reading of 118.8.
While consumers’ outlook pulled back, the reading still hovered near pandemic-era highs. Rising prices and elevated unemployment levels may be curbing additional improvement in sentiment as the economy meanders back to its pre-COVID-19 strength.
The group’s measure of economic expectations fell to 99.1, a three-month low, while a gauge of sentiment about current conditions rose to 144.3, a pandemic high. Fewer people expected more jobs in the next six months, the report showed.
“Consumers’ assessment of present-day conditions improved, suggesting economic growth remains robust” in the second quarter, said Lynn Franco, senior director of economic indicators at the Conference Board, in a statement. “However, consumers’ short-term optimism retreated, prompted by expectations of decelerating growth and softening labor market conditions in the months ahead.”
A measure of inflation expectations for the next year edged higher, according to Tuesday’s report. That follows a separate survey published earlier this month by the University of Michigan that showed consumers expect a 4.6 per cent increase in inflation over the next year, the highest reading in a decade.
Consumers in Tuesday’s report said they were less likely to purchase cars, homes and major appliances in the next six months.