Consumer confidence slips as stock market gains fail to ease household strain

The gap between Wall Street and Main Street widened in May as U.S. consumer confidence slipped even while major stock indexes stayed near record levels. The Conference Board said its Consumer Confidence Index fell 0.7 points to 93.1, the first decline after three straight monthly gains, underscoring how rising markets have done little to ease the pressure felt by many households.

The weakness came from the here-and-now. The Conference Board’s Present Situation Index dropped 3.2 points to 121.2, while the Expectations Index rose 1.0 point to 74.4, suggesting consumers were a little more hopeful about the months ahead even as their view of current conditions deteriorated. Dana M. Peterson, the Conference Board’s chief economist, said the decline reflected the inflationary impact of the war in the Middle East as price shocks continued to feed through to gas costs. The survey covered May 1 through May 19.

That strain is showing up in everyday spending. In the Conference Board’s supplemental questions, roughly two in three respondents said they were pulling back, most often by buying fewer items and postponing big-ticket purchases. Consumers said they expected to cut back especially on clothing and shoes, hobby-related products, and toys and games, a sign that discretionary spending is becoming more vulnerable as families protect their budgets.

The picture was similar in the University of Michigan’s consumer surveys, which showed sentiment sliding for a third straight month. Its final May 2026 Consumer Sentiment Index fell to 44.8 from 49.8 in April and 52.2 a year earlier. The Current Index dropped to 45.8 and the Expectations Index to 44.1. Joanne Hsu, the survey director, said the reading sat just below the previous historical trough from June 2022, and 57% of consumers spontaneously said high prices were eroding their personal finances.

Inflation expectations also moved the wrong way, with year-ahead inflation rising to 4.8% from 4.7%. Taken together, the data suggest that households are still being squeezed by elevated gasoline prices and sticky everyday costs, even as stocks continue to rally. Before the pandemic, the Conference Board’s confidence index regularly reached about 130. Now it remains stuck in the low 90s, a reminder that market wealth is not filtering down evenly to the checkout line.