Two-thirds of Americans told the Conference Board they are cutting spending, with many delaying big-ticket purchases and trimming items such as clothes, shoes and toys.
Gas averaging $4.49 a gallon and inflation at 3.8% in April have outpaced pay growth, squeezing purchasing power; inflation-adjusted hourly earnings fell from a year earlier for the first time in three years.
Consumer confidence slipped 0.7 point to 93.1 in May, while the share saying jobs are plentiful fell to 25.5%, the lowest in three years, underscoring a low-hire, low-fire labor market.
Confidence rose among households earning at least $100,000 but fell for most others, reinforcing signs of a K-shaped economy even as stocks hover near records and unemployment remains low.
Other data point to broader caution: inflation-adjusted retail sales fell in April, and the University of Michigan’s consumer sentiment index dropped to a record-low 44.8 in May.
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