A tale of two consumer sentiment gauges

The Conference Board’s consumer confidence index declined 0.7 percentage point in May to 93.1, remaining higher than its January level. Future expectations rose modestly and nearly offset a drop in how Americans assessed current conditions. Mentions of prices and oil and gas increased for a second consecutive month, while references to war, geopolitics, and conflict stayed elevated, suggesting ongoing concerns about inflationary effects on household budgets. The survey cutoff on May 19 occurred during a period when Middle East conflict pushed global prices higher and before optimism about an Iran deal emerged. Consumers reported weaker economic sentiment, and differences in survey design may influence results, with the University of Michigan emphasizing purchasing power and financial conditions and the Conference Board focusing more on labor market health.

"The Conference Board's monthly consumer confidence index fell 0.7 percentage point in May, to 93.1. But it ticked down to a level that is still above where it stood as recently as January. A modest jump in future expectations nearly offset a pullback in how Americans view current conditions."

"Still, consumers' "references to prices and oil and gas increased in frequency for a second consecutive month, while mentions of war, geopolitics and conflict remained elevated-likely signaling consumers' underlying concerns about the inflationary impacts of the war in the Middle East on their wallets," the Conference Board said in a release."

"The survey cutoff was May 19, capturing a period when the war in the Middle East lifted global prices and before optimism over an Iran deal emerged in recent days. The bottom line: Consumers feel crappy about the economy."

"But just how crappy might have something to do with how the surveys are structured. The University of Michigan puts more emphasis on purchasing power and financial conditions, both of which have been meaningfully under pressure in recent years as inflation shocks reignited. But the Conference Board largely focuses its queries on the health of the labor market, which has held up despite some softening in hiring."

Read at Axios