Between record-high gas prices, infant formula shortages, and surging grocery bills, May was a tough month for consumers.
That’s reflected in the Conference Board’s Consumer Confidence Index, which declined in May after a small increase in April. Rising prices appear to be taking a toll on consumers’ pocketbooks and are affecting their overall outlook.
“Purchasing intentions for cars, homes, major appliances, and more all cooled—likely a reflection of rising interest rates and consumers pivoting from big-ticket items to spending on services,” said Lynn Franco, senior director of Economic Indicators at The Conference Board.
Franco also said consumers appear to be reevaluating summer vacation plans because of rising hotel rates and airfares.
“Indeed, inflation remains top of mind for consumers, with their inflation expectations in May virtually unchanged from April's elevated levels,” Franco stated. “Looking ahead, expect surging prices and additional interest rate hikes to pose continued downside risks to consumer spending this year."
Consumers feeling inflationary pressure
An analysis of recent reviews posted at ConsumerAffairs also suggests that some consumers are feeling inflationary pressures. Kenneth, of Manchester, Pa., told us he was “very satisfied” with the coverage he was receiving from CarShield but recently decided he could no longer afford it.
“They helped me with two repairs I would not have wanted to deal with alone,” Kenneth wrote in a ConsumerAffairs review. “Unfortunately with the past years growing inflation with everything from groceries to gas I had to cancel my subscription, sadly.”
Brett, of Jackson, Miss., was considering Smile Direct but was reluctant to sign up because the $90 monthly fee was outside his current comfort zone.
“I knew I couldn't afford much, inflation has hit my family hard, especially groceries and gas, and as the sole income, I can't stray far from the budget,” Brett told us.
Inflation isn’t the only thing that weighed on consumers’ minds last month. Despite the well-publicized difficulty that businesses have had hiring employees, consumers are feeling less secure in the workplace.
The Conference Board report shows that 51.8% of consumers described jobs as "plentiful," down from 54.8% in April. Just over 12% of consumers said jobs are "hard to get," up from 10.1%.