US consumer confidence unexpectedly drops in May

US consumer confidence unexpectedly deteriorated in May, according to data from the Conference Board.

The Conference Board Consumer Confidence Index fell to 92.6 from 94.7 in April, missing expectations for an increase to 96.0.

The present situation index dropped to 112.9 from 117.1, while the expectations index slipped to 79.0 in May from 79.7 the month before.

“Consumer confidence declined slightly in May, primarily due to consumers rating current conditions less favorably than in April,” said Lynn Franco, director of economic indicators at the Conference Board.

“Expectations declined further, as consumers remain cautious about the outlook for business and labour market conditions. Thus, they continue to expect little change in economic activity in the months ahead.”

Dennis de Jong, managing director at UFX.com, said: “Alongside first quarter figures pointing to a slowdown of the world’s biggest economy last week, US consumer confidence has fallen, giving those calling for Fed Chair Janet Yellen to raise borrowing rates for the first time this year food for thought.

“Yet for the lower than expected confidence of consumers, Yellen will know that the situation isn’t clear cut. A strong dollar and poor global demand has hurt exports and oil prices remain in the doldrums. There is also the significant matter of a US presidential election in November to contend with, which has contributed to domestic economic uncertainty.”