US Consumer Confidence Slips in May as Iran War Pushes Up Oil Prices

Two-Thirds of Consumers Cut Spending

US consumer confidence edged down in May as households felt the pinch from higher prices, including gasoline, tied to the war in Iran.

The Conference Board said on May 26 that its US consumer confidence index fell 0.7 point from the previous month to 93.1 in May. That was above the median estimate of 92 in a Bloomberg survey of economists.

A measure of current conditions fell 3.2 points, the lowest level in three months. By contrast, the expectations gauge for the next six months rose to 74.4.

Still, assessments that jobs were plentiful dropped to the lowest level since 2021.

The May survey adds to evidence that Americans are growing more anxious about the rising cost of living. The recent surge in oil prices has placed a particularly heavy burden on lower-income households, even as the labor market remains broadly stable and shows few signs of widespread layoffs.

According to the report, two-thirds of consumers said they had cut spending because of higher prices. Respondents said they were buying fewer items, postponing purchases of expensive goods, or opting for cheaper versions of the same products.

The University of Michigan said last week that its consumer sentiment index fell to a record low in May as long-term inflation expectations deteriorated sharply and views on personal finances worsened.

Dana Peterson, the Conference Board's chief economist, said in a statement that consumer confidence slipped slightly in May as inflation pressures linked to the war in the Middle East intensified.

Kim Jung-a, guest reporter at Hankyung.com, kja@hankyung.com