US consumer confidence slipped in May
US consumer confidence slipped in May 2016. It stood at 92.6 compared to 94.7 in April, according to the report published by the Conference Board. The Market had expected a rise in consumer confidence in May.
In March and April, the consumer confidence index showed strong performances. US (SPY) (IVV) (VOO) consumers increased their spending in these months, and household purchases and household investments rose.
Why consumer confidence fell in May
Consumer confidence fell in May mainly due to falling confidence in the economy due to current economic conditions. US consumers remained cautious about the economic outlook due to uncertain labor market conditions and the business climate.
As we saw earlier, manufacturing PMI and industrial production showed slow rises in April due to weak global (ACWI) (VTI) demand, and the strong US dollar (UUP) hampered exports. This indicated that consumers were less optimistic about the economy in the short term.
More jobs are expected to be added to the US economy soon. If the payroll increases, it will provide a boost to consumer spending.
In the next article, we’ll analyze the performance of the US non-farm payroll in May 2016.