Chicago economy

US consumer confidence plummets in May | Radio WGN 720

SILVER SPRING, Maryland (AP) –

US consumer confidence fell slightly for the second straight month as Americans’ views on their current and future prospects faded amid persistent inflation.

The Conference Board said Tuesday that its consumer confidence index fell to 106.4 in May from 108.6 in April.

The business research group’s Current Situation Index, which measures consumers’ assessment of current business and working conditions, also fell in May to 149.6 from 152.9 in April.

The expectations index, based on consumers’ six-month outlook for income, business and labor market conditions, also fell in May, to 77.5 from 79 in April. It was above 80 in February and remains a low point in the survey.

President Joe Biden will meet with Federal Reserve Chairman Jerome Powell on Tuesday as soaring inflation continues to eat away at Americans’ incomes.

Tuesday’s meeting will be the first since Biden reappointed Powell as head of the central bank and weeks after the Senate confirmed a second term. The White House said the couple would discuss the state of the US and global economy and in particular the four-decade high inflation, described as Biden’s “top economic priority”.

The Federal Reserve raised its key interest rate by half a point in early May, the main mechanism for fighting inflation. Multiple rate hikes, with the possibility of increases of more than half a point, are expected this year.

Inflation has soared over the past year at its fastest pace in more than 40 years, with rising costs for just about everything offsetting wage increases for Americans.

The Labor Department reported earlier in May that consumer prices jumped 8.3% last month from a year ago. This figure was lower than the 8.5% year-on-year rise in March, which was the highest since 1981. On a monthly basis, prices rose 0.3% from March to April, the smallest increase in eight months.

U.S. producer prices climbed 11% in April from a year earlier, a sizable gain that indicates high inflation will continue to burden consumers and businesses in the months ahead.