The Conference Board Consumer Confidence Index decreased in May and now stands at 60.8 (1985=100), down from 66.0 in April. The bad news follows last week’s U.S. unemployment report that says that first time jobless claims soared to 424,000, which means that there is virtually no hiring occurring in the economy as unemployment officially hovers at 9%. The real rate of unemployment is much higher as the U.S. economy remains weak with no recovery in sight.
Consumer views of current conditions are grim. Those claiming business conditions are “good” decreased to 14.6% from 15.5%, while those claiming business conditions are “bad” increased to 37.1% from 35.9%. Consumers’ appraisal of the labor market was also less favorable than last month. Those stating jobs are “hard to get” increased to 43.9% from 42.4%, while those stating jobs are “plentiful” increased to 5.6% from 5.1%.
The latest survey does not bode well for the U.S. auto industry, which is expected to report steep May sales declines tomorrow.
May new-vehicle retail sales are projected to come in at 858,400 units, which represents a seasonally adjusted annualized rate (SAAR) of 9.6 million units, with all sales coming in at 11.9 million units, based on the first 11 selling days of the month.
This would be the lowest SAAR has since last September, and it points to a weak summer sales.
“A more pessimistic outlook is the primary reason for this month’s decline in consumer confidence. Consumers are considerably more apprehensive about future business and labor market conditions as well as their income prospects. Inflation concerns, which had eased last month, have picked up once again,” said Lynn Franco, Director of The Conference Board Consumer Research Center.
About Ken Zino
Ken Zino, publisher (kzhw@aol.com), is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
Zino is at home on test tracks, knows his way around U.S. Congressional hearing rooms, auto company headquarters, plant floors, as well as industry research and development labs where the real mobility work is done. He can quote from court decisions, refer to instrumented road tests, analyze financial results, and profile executive personalities and corporate cultures.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
As lower incentive levels, high gas prices and inventory shortages plague the month-to-date sales rate, light-vehicle sales in May have been unable to shake the slowdown from the stronger pace of the first four months of 2011.