(Washington) Consumer confidence ended May with a less marked decline than the first estimate by the University of Michigan, according to the final estimate released Friday.
The confidence index ended the month down 6.8% compared to the previous month, falling to 59.2 points, while the preliminary estimate, published in mid-May, placed it at 57.7. points.
It is also significantly better than analysts’ expectations, which were for an index of 57.8 points, according to the consensus published by briefing.com.
“The decline is reminiscent of that seen during the 2011 debt ceiling crisis, when confidence also plunged,” noted Joanna Hsu, director of the survey, quoted in the statement.
Democrats and Republicans are engaged in a tussle over raising the US debt ceiling, a necessary legislative maneuver so that the world’s largest economy can continue to borrow and pay its bills, officials and creditors.
But the lack of progress in the discussions reinforces the risk of a partial American default, which would be a first, possibly as early as June 1, if the United States is not able to settle its next deadline.
Credit rating agency Fitch announced on Wednesday that it is placing the United States’ AAA rating on review for a possible downgrade, a sign that the market is beginning to price in the risk of default.
“Long-term expectations have also dipped, indicating that consumers are worried that the recession will materialize and add to their difficulties,” she added.
The expectations sub-indicator fell by 8.4%, to 55.4 points, while that relating to the current economic situation fell by 4.8%, to 64.9 points.
The fact remains that the latter remains on the rise, according to data published Friday by the Ministry of Commerce, at 4.4% over one year in April, against 4.2% in March, according to the PCE index, the one favored by the American Central Bank (Fed) to decide whether or not to raise its rates again.
Despite everything, consumers are expecting inflation to be lower at the end of the year than they were still expecting in April.