NEW YORK — U.S. consumer confidence weakened in recent weeks as households faced higher prices linked to tensions and supply disruptions in the Middle East, according to survey data and economic reports released in June.
The latest readings from consumer surveys showed Americans remained concerned about inflation, particularly rising energy costs, even as broader economic activity continued to expand. The Conference Board said its Consumer Confidence Index slipped in May, citing concerns about the inflationary effects of the conflict in the Middle East and its impact on household budgets.
“Consumer confidence edged downward in May as the inflationary impacts of the war in the Middle East intensified,” Dana M. Peterson, chief economist at The Conference Board, said in a statement accompanying the survey results.
The organization reported that consumers were less positive about current business conditions and labor-market prospects than in the previous month. Survey respondents increasingly cited prices, gasoline costs, oil markets and geopolitical tensions among the factors affecting their outlook.
Separate data from the Commerce Department released on Thursday showed inflation remained elevated. The personal consumption expenditures price index, the Federal Reserve’s preferred inflation measure, rose above 4% annually in May, driven in part by higher energy prices associated with the Middle East conflict, Reuters reported.
At the same time, consumer spending continued to grow, supported by tax refunds and a still-resilient labor market, according to the Commerce Department. Economists and policymakers have closely monitored whether higher fuel and energy costs could further affect household sentiment and spending decisions.
Other surveys painted a mixed picture. The University of Michigan’s consumer sentiment index rose modestly in early June from a record low reached in May, helped by some easing in gasoline prices. However, the survey said overall sentiment remained well below levels seen earlier in the year and below readings from a year ago. Consumers continued to express concern about inflation and living costs.
Business groups also reported growing caution among consumers and small-business owners. Industry organizations said households were increasingly delaying discretionary purchases and focusing spending on necessities as prices remained elevated.
As of Thursday, financial markets were continuing to assess the impact of higher energy costs and inflation pressures on the U.S. economy. Federal Reserve officials had not announced any change in monetary policy following the latest confidence and inflation reports, and further developments remained under review.
