Consumer comfort in U.S. declines to lowest level in eight weeks

WASHINGTON – Consumer confidence declined to an eight- week low as attitudes about the economy dimmed, particularly among those at the bottom of the income ladder.

The Bloomberg Consumer Comfort Index decreased to 43.7 in the week ended May 3, the fourth straight decline, from 44.7 the prior period. Sentiment among those making less than $15,000 a year slumped by the most since January 2011. For those earning more than $100,000, it held above 70 for a fifth week, the longest such streak in eight years.

“Income differences remain striking,” Gary Langer, president of Langer Research Associates LLC in New York, which produces the data for Bloomberg, said in a statement. “The CCI’s turbulent 2015 reflects the economy’s mixed performance.”

Optimism toward the economy deteriorated to an almost three-month low, indicating Americans remain guarded about the expansion’s prospects following the weakest quarter in a year. Bigger wage gains would ease the burden on lower-income households facing the highest gasoline prices since early December.

- Advertisement -

While the string of declines in sentiment is the longest in a year, the measure remains above last year’s average of 36.7 that was the best since 2007.

Two of three components in the index retreated last week. Americans’ views of the economy fell to 35.8 from 37.3 in the prior period.

The buying-climate index, showing whether this is a good time to purchase goods and services, declined to a six-week low of 39.8 from 41.2. The measure on personal finances held at 55.6, the lowest since the week ended March 8.

Income groups

The gauge among Americans earning less than $15,000 a year plunged by 6.3 points to 21.4, its lowest level since early December. Confidence of those making at least $100,000 cooled to 71.9 from 73.7 in the prior period. Five straight weeks of readings exceeding 70 is the longest stretch since April 2007.

The difference in sentiment between those at opposite ends of the income scale is 50.5 points, the second-biggest gap since November 2007.

The report also showed optimism among men declined for a fourth week, to 44 from 46.7, while sentiment among women increased.

Three of four U.S. regions showed a drop in sentiment last week, led by the South, where it declined to its lowest this year.

U.S. Midwest

Confidence in the Midwest rebounded after a 7.7 point decline in the prior week that was the biggest since February 2004. The region’s gauge rose to 46 from 43.2 in the previous report.

A pickup in employment could help spark a turnaround in confidence. Payrolls probably rose by 230,000 workers in April after a 126,000 gain the prior month that was the smallest since 2013, according to the median forecast in a Bloomberg survey before a May 8 report from the Labor Department.

The Bloomberg Comfort Index has been presented on a scale of zero to 100 since May, rather than the previous minus 100 to 100, with the midpoint shifting to 50 from zero. The change is also reflected in the gauge’s components. It doesn’t affect the measures’ relationship to each other or their correlation with other economic indicators. Historical data has been revised and analysis of trends, values and other variables also aren’t affected.

No posts to display