US: consumer confidence starting to ebb - ING

Economists at ING explain that the U.S. consumer confidence fell again, possibly reflecting the lack of headway being made on Presidential promises at a time when real incomes are being squeezed.

Key quotes:

"The US Conference board measure of consumer confidence has fallen more than expected in May. It now stands at 117.9 versus 119.5 consensus (119.4 was the previous reading) with the weakness resulting from a drop in the expectations component - 102.6 down from 105.4 last month. Note the present situation component was little changed."

"The fact that the expectations component is down 10 points in 2 months may reflect disappointment that President Trump has not been able to push on with many of his campaign promises. The lack of meaningful action on tax at a time when wage growth has stalled and the cost of living is increasing may be impacting household expectations about their future finances and the economy. In this regard, the data shows people on higher incomes saw substantial falls in confidence while those on more modest incomes returned flat to higher confidence readings." 

"At the moment, the aggregate readings remain close to cyclical highs and it is higher than before the Presidential election. However, the momentum is shifting towards ebbing confidence with the concern that this could translate into softer consumer spending growth in coming months and quarters."