The Conference Board's Consumer Confidence Index dropped to 60.8 in May from 66.0 in the prior month. The 5.2-point decline wiped out a large part of the improvement of the last six months. The Present Situation (39.3 vs. 40.2) and Expectations (75.2 vs. 83.2) indexes both fell in May.

Labor market conditions showed a small improvement in May, with the number of respondents indicating that jobs are plentiful advancing to 5.6% from 5.1% in April. However, the number responding that jobs are hard to get rose to 43.9% from 42.4% in April. The net of these indexes rose slightly to 38.3 during May from 37.3 in April, which bodes poorly for the unemployment rate in May (see Chart 6). The jobless rate increased to 9.0% in April from 8.8% in March. The employment report for May will be published on Friday, June 3.

Asha Bangalore — Senior Vice President and Economist

http://www.northerntrust.com

Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.

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