Consumer confidence hits six-month low
Consumer confidence dropped in May to the lowest level in six months, according to the Conference Board survey conducted by the Nielsen Co. The dip comes after new optimism emerged in April. The board's index fell to 60.8 in May from a revised 66 the month before. Lynn Frank, director of the Conference Board research center, said consumers are considerably more concerned about the labor market and future business conditions. "Inflation concerns, which had eased last month, have picked up once again. On the other hand, consumers' assessment of current conditions declined only modestly, suggesting no significant pickup or deterioration in the pace of growth," Franco said. Fewer respondents described conditions as "good," and more consumers surveyed stated jobs were "hard to get." Even the short-term outlook turned more pessimistic in May. Roughly 17% of consumers said they expect conditions to improve over the next six months, down from 19.2% the month before. Paul Dales, a senior economist at Capital Economics said confidence likely dropped because of the decline in house prices in the first quarter, a flattening of equity prices, the increase in initial jobless claims and a general softness in the economy. "In short, households still do not have the ability or willingness to boost their spending significantly," Dales said. Write to Jon Prior. Follow him on Twitter @JonAPrior.