As we detail above, across the socio-economic and geo-political spectrum, these are “Happy Days are NOT Here Again”
U.S. consumer confidence dropped in May to its lowest point since February 2021, according to the Conference Board’s monthly survey.
The survey rated confidence in April at 108.6 but found it had slipped in May to 106.4.
The sub-index monitoring consumers’ view of the present economy reflected “perceived softening” in the jobs market, the survey report said; consumers also are glum about the economy’s prospects for improving this year.
Rising interest rates “pose continued downside risks to consumer spending this year” on big-ticket items such as homes, major appliances, and vehicles, the report found.
Inflation also is a chief worry among consumers.
The median U.S. home price reached another record high in April, increasing 20.6 percent year on year in March, the fastest annual jump in 35 years, the S&P CoreLogic Case-Shiller Index reported.
Mortgage rates are now at or close to their highest in ten years.
TREND FORECAST: Consumer confidence will not rise until inflation shows a consistent downward trend and wages rates rise above inflation.
Some analysts claim that inflation has peaked, or is peaking now. If so, that will not be clear until at least August, when July’s figures are reported. More likely, China’s lockdowns and the port clogs it has created will extend inflation’s strength through the summer.
If inflation remains strong until fall, it will not begin to reverse until late this year.