US consumer confidence fell in May amid mounting inflation concerns as the Middle East conflict has stretched for about three months now, a survey by the Conference Board showed Tuesday.
The consumer confidence index ticked down to 93.1 this month from April's upwardly revised reading of 93.8. The consensus was for a 92 print in a Bloomberg survey.
"Consumer confidence edged downward in May as the inflationary impacts of the war in the Middle East intensified," Conference Board Chief Economist Dana Peterson said.
On Friday, a University of Michigan survey showed that consumer sentiment declined to a fresh record low this month as people fear that high gasoline prices could erode their purchasing power.
Gasoline prices in the US have surged as the Iran war pushed crude oil costs higher due to the effective closure of the Strait of Hormuz. Its been about three months since the conflict started on Feb. 28, though a fragile ceasefire between the US and Iran continues to hold.
"Consumers' write-in responses on factors affecting the economy continued to skew towards pessimism in May," the Conference Board's report said. "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."
Consumers' one-year inflation expectations "ticked downward" this month, but remained elevated, according to the survey.
The present situation measure dropped 3.2 points sequentially to 121.2, while the expectations component increased by one point to 74.4, the Conference Board said.
Consumers' assessment of current business and labor market conditions were "moderately less positive" than last month, while their expectations six months from now showed "modest improvements," Peterson said.
