WASHINGTON: US consumer confidence edged down for the second straight month in May, as optimism continued to retreat from record highs, according to a closely-watched monthly survey released on Tuesday (May 30).
Consumers' short-term outlook for business conditions grew slightly dimmer and the share of survey respondents expecting jobs to become more plentiful also slipped, the Conference Board reported.
The confidence index decreased to 117.9 points from 119.4 in April, defying analysts' expectations, but a central component, the Present Situation Index, added a modest 0.4 points to 140.7.
Along with the surge on Wall Street, consumer sentiment boomed following November's election of President Donald Trump on hopes of economic renewal sparked by promises of slashed taxes and regulation.
But the Trump agenda has met with delays in implementation as well as some obstacles in Congress, stymying many of the White House's goals, particularly changes to health care and tax policy.
Lynn Franco, head of economic indicators at the Conference Board, noted that despite the drop in the overall index consumer views of present-day conditions had held steady, suggesting economic conditions were unchanged.
"Looking ahead, consumers were somewhat less upbeat than in April, but overall remain optimistic that the economy will continue expanding into the summer months," she said in a statement.
The share of respondents saying conditions were "good" fell slightly to 29.4 per cent from 30.8 per cent.
Meanwhile, those saying jobs remained "plentiful" also fell slightly from 30.3 per cent to 29.9 per cent.
Ian Shepherdson of Pantheon Macroeconomics said the May numbers remained well above their pre-election levels and were supported by sky-high stock prices and an increasingly tight labour market.
However, he said, "We remain skeptical of the reliability of the data, given that the candidate who won the most votes lost the election."
The survey showed those expecting the more jobs in the coming months fell to 18.6 per cent from 21.9 per cent, while those expecting fewer jobs fell 1.8 points to 12 per cent.
The percentage of consumers expecting business conditions to improve over the next six months shrank nearly four points to 25.1 per cent.
Those believing things will get worse also fell three tenths of a point to 10.1 per cent.
James Bohnaker of IHS Markit said high consumer confidence, rising disposable incomes and growing household net worth all point to a rebound in consumption in the second quarter after a lackluster start to the year.
"We expect real consumer spending growth to be above three percent in the second quarter since the first quarter pullback was temporary," he said in a client note.