The merry month of May has started out--at least as far as data submissions are concerned--in anything but merry fashion. A case in point is the report issued earlier this morning by the U.S. Conference Board, a New York-based research organization. Specifically, the survey noted that confidence sagged in May, falling to a reading of 64.9 for the month. That is well below the 68.7 survey result for April, a figure that was downwardly revised from the initial estimate of 69.2. Expectations for May had been 70.0. Clearly, this was an unexpected shortfall in a closely watched metric.
The confidence reading comes just four days after a consumer sentiment survey issued by the University of Michigan registered a better-than-expected result. And this latest report comes three days ahead of the scheduled release of a pair of critical economic reports, namely the monthly survey on non-farm payrolls and the unemployment rate, and the Institute for Supply Management's issuance on manufacturing activity across the country.
As for the confidence report, it was the weakest reading of the year, following gauges of 69.5 in March and the aforementioned 68.7 score in April. As for individual components, the tally on the present situation fell to 45.9 in May from 51.2 in April. Expectations, a higher reading, normally, as the public is often more optimistic looking out six months, did, in fact, come in higher, registering a reading of 77.6. However, here, too, the result represented a retracement from April, when the score had been 80.4. It was 82.5 in March.
As to the present situation, those seeing business conditions as good fell modestly, while those expressing displeasure, or suggesting that the present situation was bad, increased nominally. Those seeing jobs as being plentiful, meanwhile, fell in the now-ending month, while those suggesting that jobs were hard to get increased notably rising from 38.1 to 41.0. It was a similar story when it comes to expectations. Optimism would seem to be even more scarce now than it was a month or two ago.
This was clearly not an upbeat report, and its suggests that economic growth, estimated at 2.2% for the first quarter, but due to be revised later this week, probably will moderate going forward.
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.