US consumer confidence drops slightly in May

US consumer confidence declined modestly in May as persistently high inflation and rising interest rates force Americans to become more cautious about purchasing large-value items, including motor vehicles and homes, which can reduce economic growth.

The Conference Board survey released on Tuesday (31) also showed that consumers’ perceptions of the labor market have softened a little this month.

While the drop in confidence was small, it suggested that the Federal Reserve’s aggressive monetary policy actions to slow demand were starting to have an impact.

The Conference Board’s consumer confidence index dropped to 106.4 this month. April’s data was revised up to 108.6 from the previously reported reading of 107.3. The index remains above its pandemic lows.

A separate report on Tuesday showed that the S&P CoreLogic Case-Shiller 20 index of metro home prices rose at a record 21.2% year-on-year in March, after rising 20.3% in February. Tight inventories, especially of older homes, are driving home prices up.

High home price inflation was reinforced by another report from the Federal Housing Finance Agency, which showed that home prices rose 19% in the 12 months to March, after rising 19.3% in February.

Source: CNN Brasil

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