U. Michigan Confidence Index Falls, Outlook Gloomy
{{#rendered}} {{/rendered}}U.S. consumer confidence declined in May for the second month in a row, a survey releasedFriday showed, confounding forecasts for a steady reading and putting a gloomy face on consumers' outlook.
The sentiment index in the University of Michigan's (search) final survey of consumer confidence for May fell to 90.2, its lowest point since December, from April's final reading of 94.2, according to people who saw the subscription-only report.
Economists polled by Reuters had looked for an unchanged readionth in a row to 103.6 from April's final reading of 105. This matches the current conditions measured in February.
{{#rendered}} {{/rendered}}The expectations index declined sharply to 81.6 from April's final reading of 87.3, also a second consecutive monthly drop. Consumer expectations have not been this low since September.
"Hard to point to a specific factor, but clearly, measured confidence is volatile and should not be counted on to support consumer spending," said Pierre Ellis, senior international economist at Decision Economics (search) in New York.
"The Michigan indexes were revised down sharply across the board by multiple points. The immediate suggestion is that actual sentiment deteriorated by double that between the early month and late month. That is probably an exaggeration, but clearly there has been a sharp worsening of sentiment over course of May," he added.
{{#rendered}} {{/rendered}}The University of Michigan consumer sentiment index, which is released to subscribers, is made up each month of calls to about 500 households. The preliminary survey consists of responses from about 300, while the final survey is round out at the end of the month with another 200 replies.