U.S. consumer confidence drops to 15-year low

U.S. consumer confidence declined to 57.2 in May 2008 -- its lowest level in 15 years -- as consumers continued to express concern over record gasoline prices and virtually non-existent job growth, the Conference Board announced Tuesday.

Economists surveyed by Bloomberg News had expected the index to drop to 60.0 in May 2008. Consumer confidence totaled 62.8 in April 2008 and 65.9 in March 2008. In February 2008, the index stood at 76.4.

Also, the board said consumers' evaluation of present-day conditions weakened further in May 2008. Those claiming business conditions are "bad" increased to 30.6% from 26.5%, while those claiming business conditions are "good" declined substantially, to 13.1% from 15.4%.

Meanwhile, consumers' assessment of the job market was considerably more pessimistic than last month. Those saying jobs are "hard to get" rose to 28.0% from 27.9, while those claiming jobs are "plentiful" decreased to 16.3% from 17.1%.

Further, the board said consumers' short-term expectations continued to deteriorate in May 2008. Consumers expecting business conditions to worsen over the next six months increased sharply to 33.6% from 27.4%, while those anticipating business conditions to improve increased slightly, to 10.4% from 10.1%.

Economic Analysis: The May 2008 consumer confidence headline says it all: U.S. consumer confidence is at a 16-year low. The slow growth / no growth U.S. economy understandably is weighing on the typical person's outlook. Stagnant wages for many, record-high energy prices, increasing food prices, uncertain corporate prospects and the worst housing market in a generation, suggest difficult economic circumstances for many Americans, and one would expect concern about the above to show up in polls / consumer surveys. The public (correctly) senses that economic conditions are not good for most individuals and businesses; it will take several months of positive economic data points to reverse this outlook.