Consumer confidence rose +4.9 points to a strong 134.1 in May. Consumers’ assessments of the current situation gained +6.2 points to 175.2, the highest in over 18 years. Expectations rose as well, gaining +3.9 to 106.6, but the difference between the current and future assessments widened from -66.3 to -68.6, a strong indicator of a future recession. In fact that difference is lower than the level in five of the past six recessions. And consumer confidence did not spill over into either the manufacturing or housing sectors. New orders for durable goods fell -2.1% m/m in April to a 0% y/y rate. Orders for autos led the decline, dropping -3.4% m/m to +2.9% y/y – just three months ago the y/y rate was +10.6%. After stripping out autos and other volatile components, “core” orders were just as disappointing, losing -0.9% m/m to only +1.3% y/y as compared to the long-term average of +2.9%. Similarly, new home sales fell -6.9% m/m, driven in part by a sharp +11.9% m/m increase in prices.
