United States
The Conference Board’s consumer confidence index in May fell to 117.9 from 119.4. The estimate was 119.5. The index still remains at a high level and is well off the 100.8 print seen in October but it peaked at 124.9 in March. It was the Expectations component that accounted for the m/o/m headline decline as the Present Situation was up a hair. The answers to the labor market questions were mixed as those that said jobs were Plentiful fell .4 pts to a 3 month low but those that said jobs were Hard To Get fell 1.2 pts to the lowest since February 2007. Under the Employment heading, those expecting More Jobs fell 1.3 pts to the least since November. Those expecting an increase in Income was up by .5 pt but only after falling by almost 4 pts last month and those expecting a Decrease rose. Those that expect better business conditions fell almost 4 pts to the weakest also since November as maybe expectations about the Trump agenda fully fulfilling itself is now in question.
Also of note, there was a notable drop in spending intentions. Those that plan on buying an auto in the coming 6 months fell 2 pts to the least since July 2016 for reasons that are becoming very clear to anyone watching. Those that plan on buying a house fell .6 pts to the least in 4 months and those that plan on buying a major appliance was down by almost 4 pts to the lowest since June 2016. One year inflation expectations held at 4.7% for a 3rd straight month.
Lastly, there was a large drop in the confidence of those making between $75-125k. From $75-100k, confidence fell 17.2 pts and for those making between $100-$125, it fell by 23.6 pts. I guess you can call this level of income somewhat squeezed between being about twice the average income but still well below something that makes a family of four comfortable.
Bottom line, the bloom is coming off the rose in terms of the confidence spike post election. While the headline figure is still elevated and the job market answers were good, the spending intentions are definitely showing some hesitancy for big ticket purchases. As for the market response, there rarely is any to consumer confidence numbers because they don’t give us any good clues as to future economic behavior.
Peter is the Chief Investment Officer at Bleakley Advisory Group and is a CNBC contributor.