With war (and rising gas prices) now fully embedded in respondents' minds (along with record high stock prices), it is perhaps not entirely surprising that The Conference Board's Consumer Confidence dipped in May (but was better than expected).

The headline index dipped 0.7 points to 93.1 in May, down from an upwardly revised 93.8 in April.

The Present Situation Index - based on consumers’ assessment of current business and labor market conditions - retreated by 3.2 points to 121.2.

The Expectations Index - based on consumers’ short-term outlook for income, business, and labor market conditions - rose by 1.0 points to 74.4 - the highest since Dec 2025.

Source: Bloomberg

“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.

“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.”

Consumers’ average and median 12-month inflation expectations ticked downward but remained elevated.

The overall trend of the labor market remains weaker...

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.

By political affiliation, Republicans remained the most optimistic, while Independents were the only group that saw confidence tick up on a month-over-month basis.

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.