According to TD Securities analysts, United States consumer confidence, as measured by the Conference Board, slipped only marginally in May to 93.1 from an upwardly revised 93.8 in April (TD: 90.5, consensus: 92.0), continuing to outperform other sentiment gauges such as UMich and Morning Consult [1]. Despite this resilience, the report highlights that persistent conflict in Iran and elevated gasoline prices are likely to weigh on consumer confidence in the future [1].
Survey details indicate weaker buying plans, a softer labor differential—which declined to 6.9—and respondents increasingly focused on prices, oil, and geopolitical risks [1]. The labor differential's decline aligns with falling job finding expectations in the NYFed survey [1]. Inflation expectations remained high, and the impact of the Iran shock is being felt by consumers, as reflected in their responses [1].
The Conference Board noted that consumers' write-in responses on factors affecting the economy continued to skew towards pessimism in May, with increased references to prices, oil, and gas for a second consecutive month, and sustained mentions of war, geopolitics, and conflict [1]. These trends likely signal consumers' underlying concerns about the inflationary impacts of the war in the Middle East on their finances [1].
TD Securities analysts believe that as the Iran conflict persists and gasoline prices remain high, consumer confidence is likely to eventually move lower, despite the current modest decline in the headline figure [1].
CONCLUSION
US consumer confidence has shown resilience, declining only slightly in May, but underlying indicators point to growing concerns about inflation, oil prices, and geopolitical risks. Analysts warn that continued conflict in Iran and elevated gasoline prices could lead to further declines in confidence in the coming months.