Consumer Confidence Dips in May

The drop was due to "the inflationary impacts of the war in the Middle East," said Dana Peterson of The Conference Board.
May 27, 2026
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Consumer Confidence Dips in May

The Conference Board Consumer Confidence Index dipped 0.7 points to 93.1 (1985=100) in May, down from an upwardly revised 93.8 in April.

"Consumer confidence edged downward in May as the inflationary impacts of the war in the Middle East intensified,” said Dana M Peterson, chief economist, The Conference Board, in a statement.

"Consumer appraisals of current business conditions and the current labor market were moderately less positive compared to last month. This was somewhat offset by modest improvements in consumers’ expectations for business conditions and the labor market six months from now. Meanwhile, income expectations eased in May, as those anticipating less income rose.”

Demographic 

Among age groups, confidence ticked up for consumers aged 35-54, but trended downward for older and younger consumers, both month-over-month and on a six-month moving average basis.

By income, confidence among higher income groups trended upward on a six-month moving average basis.

By generation, confidence improved for the Silent Generation (the oldest group) but was little changed or lower among other generations. 

Inflation

Consumers’ write-in responses on factors affecting the economy continued to skew towards pessimism in May. 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’ average and median 12-month inflation expectations ticked downward but remained elevated. The percentage of consumers saying interest rates over the next 12 months will be higher on net stood at nearly 50% in May.

The ongoing stock market rally—largely fueled by the tech sector and rising hopes for an end to the Middle East conflict--likely influenced consumer expectations of higher stock prices a year from now.

Meanwhile, the share of consumers who said a US recession over the next 12 months is “very likely” and “somewhat likely” rose. Those saying recession is “not likely” declined. 

Consumers’ plans to buy big-ticket items over the next six months continued to shift from “yes” to “no” in May. Nonetheless, the proportion saying “yes” remained well above the other responses.

Buying plans for autos continued rising on a six-month moving average basis in May, with used cars remaining the clear preference over new cars.

Homebuying expectations inched higher on a six-month rolling basis overall, as plans to buy existing homes rose, offsetting a small dip in newly built units. Spending plans for white goods, home furnishings, and electronics eased a tad or were unchanged on a six-month moving average basis.

Consumers planning more spending on services over the next six months shifted from “yes” and “maybe” to “no” in May. Future spending plans on services were mixed.

Consumer spending trends in 2026 remained focused on “cheap thrills” and necessary services, but there was some increase in demand for discretionary services like personal travel, fitness, amusement parks, and gambling. Among all service categories, restaurants/bars/take-out, streaming/internet/mobile services, and beauty and personal care, remained among the top three spending targets.

These findings are supplemented by a set of special questions ran in May 2026:

  • Two-thirds of consumers cited cutting back on spending overall due to rising prices, as of May.
  • Most who are cutting back bought fewer items and delayed expensive purchases.
  • Many who said they are delaying purchases of items they want rather than need, plan to buy them in the next six months.
  • Consumers planned to economize on clothing and footwear, hobby items, and games/toys.

Present Situation

Consumers’ views of current business conditions eroded in May.

  • 18.5% of consumers said business conditions were “good,” down from 22.3% in April.
  • However, 17.1% said business conditions were “bad,” down from 18.1%.

On net, consumers’ views of the labor market worsened slightly in May.

  • 25.5% of consumers said jobs were “plentiful,” down from 26.9% in April.
  • Conversely, 18.6% of consumers said jobs were “hard to get,” down from 19.4%.

Expectations Six Months Hence       

Overall, consumers were moderately more optimistic about future business conditions in May.

  • 19.0% of consumers expected business conditions to improve, down from 19.4% in April.
  • Conversely, 22.5% expected business conditions to worsen, down from 23.8%.

Consumers were also more positive about the labor market outlook in May.

  • 17.5% of consumers expected more jobs to be available, up from 16.7% in April.
  • 26.0% anticipated fewer jobs, down from 26.8%.

On net, consumers’ outlook for their income prospects was slightly more pessimistic in May.

  • 20.0% of consumers expected their incomes to increase, up from 19.4% in April.
  • However, 13.7% expected their incomes to decline, up from 12.4%.
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