US Consumer Confidence Slips in May as Middle East Price Pressures Linger

Prices and Gas Weigh on Sentiment as May Consumer Confidence Edges Lower

US consumer confidence edged lower in May, as households continued to feel the sting of higher prices tied to ongoing conflict in the Middle East. The Conference Board’s Consumer Confidence Index® dipped 0.7 points to 93.1 (1985=100), down from an upwardly revised 93.8 in April, based on survey responses collected May 1–19.

The headline move was small, but the details suggest a familiar 2026 tension: consumers are a bit less upbeat about what’s happening right now, while their outlook for the next six months improved modestly—except when it comes to income.

What moved the index

The Conference Board’s report showed a clear split between “now” and “next.”

• Present Situation Index: fell 3.2 points to 121.2, reflecting softer views of current business and labor market conditions.
• Expectations Index: rose 1.0 point to 74.4, indicating slightly improved expectations for business conditions and jobs six months out.

Dana M. Peterson, Chief Economist at The Conference Board, said confidence “edged downward” as inflationary impacts from the Middle East war intensified, pushing global prices higher. In other words: consumers may be seeing some reasons for cautious optimism later this year, but they’re still managing today’s price shocks.

Business conditions and jobs: still positive, but cooling

Consumers’ assessment of current business conditions weakened in May. The share describing conditions as “good” fell to 18.5% (from 22.3% in April), while those saying “bad” also slipped to 17.1% (from 18.1%). Net views of business conditions declined, suggesting momentum has cooled even if negativity hasn’t surged.

The labor market picture also softened slightly. The share saying jobs are “plentiful” dipped to 25.5% (from 26.9%), while those saying jobs are “hard to get” eased to 18.6% (from 19.4%). The overall takeaway: employment sentiment remains more positive than negative, but it’s not strengthening.

Expectations improved—income expectations didn’t

Looking ahead six months, consumers became moderately more optimistic about business and job prospects.

• 19.0% expect business conditions to improve (slightly down from April), while 22.5% expect conditions to worsen (down from 23.8%).
• 17.5% expect more jobs to be available (up from 16.7%), while 26.0% anticipate fewer jobs (down from 26.8%).

Income expectations, however, were “slightly more pessimistic.” While 20.0% expect incomes to increase (up from 19.4%), the share expecting incomes to decline rose to 13.7% (from 12.4%). That combination can signal a widening sense of uncertainty: more people may hope for gains, but more also fear a drop.

Prices, gas, and geopolitics remain top-of-mind

Consumers’ write-in responses continued to skew pessimistic, with mentions of prices and oil and gasrising for the second month in a row. References to war, geopolitics, and conflict remained elevated—an indicator that households are connecting global events to everyday costs.

Inflation expectations ticked down slightly on average and median measures, but remained elevated. Nearly half of consumers said they expect interest rates to be higher over the next 12 months.

Big-ticket and service spending: shifting, not collapsing

The report suggests consumers are becoming more selective rather than slamming the brakes.

Plans to buy big-ticket items over the next six months continued to shift from “yes” to “no,” though “yes” still remained the most common response. Auto buying plans continued rising on a six-month moving average basis, with used cars still preferred over new.

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Homebuying expectations inched higher on a rolling basis, driven by increased interest in existing homes, offset by a small dip in plans for newly built units.

Service spending intentions were mixed. Some consumers are pulling back, but 2026 spending trends remain focused on “cheap thrills” and necessary services—with some increased demand for discretionary services such as personal travel, fitness, amusement parks, and gambling.

What to watch for

For the Economy section, the May confidence report is less about a dramatic shift and more about a steady pattern: consumers are navigating persistent price pressure, watching interest rates, and adjusting spending plans. The key question for the months ahead is whether easing inflation expectations and improved job outlooks can translate into stronger confidence—or whether geopolitical-driven price shocks keep household sentiment pinned down.The Conference Board publishes the Consumer Confidence Index® at 10 a.m. ET on the last Tuesday of every month. More information and technical notes are available at: https://www.conference-board.org/data/consumerdata.cfm

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