US consumer confidence eased in May, with worries about inflation linked to the war in Iran intensifying and households' views of the labor market being largely pessimistic. The marginal drop in confidence reported by the Conference Board on Tuesday contrasted starkly with the release last week of the University of Michigan's Surveys of Consumers, which showed consumer sentiment plumbing record lows in May.
This marks the latest sign of growing dissatisfaction with President Donald Trump's handling of the economy, despite his promise to lower inflation. Trump won the 2024 presidential election in large part because of his promise to lower inflation, but U.S. consumers have faced higher prices, first from his sweeping import tariffs and recently from the U.S.-backed war with Iran.
A Reuters/Ipsos survey last week showed Trump's presidential approval rating fell to nearly its lowest level since he returned to the White House in January 2025. The darkening mood poses a challenge for Trump's Republican party as it seeks to retain control of the U.S. Congress in the midterm elections in November.
Experts note that Americans are upset about high prices and trying to stretch every dollar, but they aren't as gloomy as they were during the Great Recession or just after 'Liberation Day' last year.
The Conference Board said its consumer confidence index slipped to 93.1 this month from an upwardly revised 93.8 in April. Economists polled by Reuters had forecast the index would drop to 92.0 from the previously reported 92.8 in April.
The labor market has a big influence on the index, while the University of Michigan survey is more sensitive to gasoline prices. The decline in confidence occurred among consumers under the age of 35 as well as those 55 years and older.
Consumers in the 35-54 age group were slightly more optimistic this month. Households with annual incomes ranging from $15,000 to $39,999 experienced a sharp decline in confidence.
Lower-income households have been disproportionately impacted by gasoline prices, which have risen more than 50% since the war in late February. The conflict has disrupted shipping in the Strait of Hormuz, straining global supply chains and boosting prices of a range of commodities, including oil and fertilizers.
The Conference Board noted that consumers' write-in responses on factors affecting the economy continued to skew toward pessimism. References to prices and oil and gas increased in frequency for a second consecutive month.
The darkening mood poses a challenge for Trump's Republican party as it seeks to retain control of the U.S. Congress.
