U.S. consumer confidence dipped in May after a slight increase the month before in the latest signal that Americans expect inflation to stick around for a while.
The Conference Board's Consumer Confidence Index released Tuesday indicated the May index dropped to 106.4 from 108.6 in April. The organization's Expectations Index – which assesses consumers' short-term outlook for income, business, and labor market conditions – also declined, dropping to 77.5 to 79.
"Inflation remains top of mind for consumers, with their inflation expectations in May virtually unchanged from April’s elevated levels," said Lynn Franco, senior director of economic indicators at The Conference Board. "Looking ahead, expect surging prices and additional interest rate hikes to pose continued downside risks to consumer spending this year."
"With the Expectations Index weakening further, consumers also do not foresee the economy picking up steam in the months ahead," Franco added. "They do expect labor market conditions to remain relatively strong, which should continue to support confidence in the short run."
The latest data from the Labor Department shows inflation soared to 8.3% annually in April, remaining near a four-decade high as the result of a combination of trillions of dollars in government stimulus, elevated consumer demand, supply chain disruptions from the COVID-19 pandemic and Russia's war in Ukraine.
The rising prices have eaten away at Americans' earnings as inflation has outpaced wage increases for months, simultaneously sparking recession concerns and battering President Biden's poll numbers.
The president is set to meet with Federal Reserve Chairman Jerome Powell in a rare Oval Office meeting on Tuesday as the inflation crisis continues. In a Wall Street Journal op-ed on Monday, Biden acknowledged that "Americans are anxious" about rising prices, and said that he has "made tackling inflation [his] top economic priority."
At the same time, Biden vowed not to interfere with the central bank's decision-making, and wrote that the Fed "has a primary responsibility to control inflation."
FOX Business' Megan Henney contributed to this report.