The U.S. consumer-confidence index fell to its lowest level since January this month – a sign that the economic recovery isn’t moving as fast as Americans would like.
Consumer confidence dipped to 64.9 in May, well below the 68.7 reading in April and trailing the 70 rating many economists were expecting. When things are good, consumer confidence typically exceeds 90. The number hasn’t exceeded 90 since early 2008, before the recession.
Concerns over the sovereign debt crisis in Europe, unemployment remaining above 8%, and mixed retail sales all contributed to the May decline in consumer confidence.
And as confidence fell this month, so too have stocks. The S&P 500 is down 5.2% in May, slashing the index’s year-to-date gains in half after a booming first four months of 2012.
The good news is that nonfarm payrolls for the month are expected to rise when the U.S. Labor Department releases its monthly employment report on Friday. Economists are expecting payrolls in May to rise 168,000, compared to a measly 115,000-job increase in April. However, 168,000 was also the number economists were projecting last month, so we won’t really know anything until Friday’s jobs report comes out.
Consumer confidence reached a 10-month high in March after 259,000 jobs were added in February. But the jobs numbers have failed to reach the 200,000 mark in each of the past two months.