Confidence among U.S. consumers unexpectedly fell in May to the lowest level in four months as Americans grew more pessimistic about the labor market.
The Conference Board’s confidence index decreased to 64.9 from a revised 68.7 in the prior month, figures from the New York-based private research group showed today. The median forecast of economists surveyed by Bloomberg News called for a reading of 69.6.
The weakest payroll gains in six months may raise concerns that economic growth is not fast enough to bring down the jobless rate. More employment is needed to boost consumer spending, which accounts for about 70 percent of the economy.
“Sentiment is still relatively subdued,” Steven Wood, president of Insight Economics LLC in Danville, California, said before the report. “Ongoing softness in the labor and housing markets, as well as the political bickering in Washington and on the campaign trail” is weighing on consumers.
Stocks maintained gains after the figure, with the Standard & Poor’s 500 Index climbing 0.9 percent to 1,329.04 at 10:05 a.m. in New York.
Home prices in 20 U.S. cities fell in the 12 months ended in March at the slowest pace in more than a year, other data today showed. The S&P/Case-Shiller index of property values declined 2.6 percent from a year earlier, the smallest decrease since December 2010, after a 3.5 percent drop in February, the group reported in New York.
Estimates for consumer confidence ranged from 62 to 74.1 in the Bloomberg survey of 70 economists. The measure averaged 53.7 during the 18-month recession that ended in June 2009.
Other Measures
The decline in the Conference Board’s measure is in line with readings from the Bloomberg Consumer Comfort Index, which dropped for four consecutive weeks after reaching a four-year high in mid-April. Both gauges are at odds with the Thomson Reuters/University of Michigan’s measure, which climbed this month to the highest level since October 2007.
The Conference Board’s measure of present conditions decreased to 45.9, the weakest since January, from 51.2 a month earlier. The gauge of expectations for the next six months fell to 77.6 from 80.4.
“Taken together, the retreat in the present situation index and softening in consumer expectations suggest that the pace of economic growth in the months ahead may moderate,” Lynn Franco, director of economic indicators at the Conference Board, said in a statement.
Jobs Hard to Get
The share of consumers who said jobs are currently plentiful decreased to 7.9 percent from 8.4 percent. Those who said jobs are hard to get climbed to 41 percent from 38.1 percent.
The percent of respondents expecting more jobs to become available in the next six months decreased to 15.8, the lowest this year, from 16.9 the previous month. The proportion who expect their incomes to rise over the next six months advanced to 15.2 percent from 13.9 percent. Even with the gain, income expectations are down from the end of 2011.
Buying plans held up in May. The share of households planning to buy autos and appliances increased.
Employers have increased payrolls by 1.18 million workers over the past six months, and the jobless rate dropped to 8.1 percent in April, compared with 8.9 percent in October. Still, employment growth has slowed in the last three months.
“The U.S. environment remains challenging, marked by still-low consumer confidence” and “changing consumer behavior,” Christopher Scott O’Hara, executive vice president at H.J. Heinz Co., the maker of the namesake condiments and Ore- Ida potato snacks, said on a May 24 conference call with analysts.