Consumer confidence sank to a seven-month low as sticker shock from rising gasoline prices made Americans anxious about the economy’s prospects and the strain on their own budgets.
The Associated Press reported that the RBC CASH Index, based on results from the international polling firm Ipsos, showed confidence at 67.1 in early May. That marked a big deterioration from 89.4 in April.
The new confidence reading was the lowest since October, when the country was still reeling from the devastation and fallout wrought by the Gulf Coast hurricanes, including high energy prices.
“Whenever we get big spikes in oil and gasoline prices it takes a toll on consumer confidence,” observed economist Ken Mayland, president of ClearView Economics.
The latest confidence snapshot came as high energy prices have touched off fresh debate on Capitol Hill, at the White House and elsewhere about what can be done to help the situation.
Oil prices topped $75 a barrel, a record high in late April. The confidence reading for April was taken before that run up. Oil prices, which have been gyrating since then, were hovering below $70 a barrel on Thursday (May 5). Gasoline prices at the pump have marched higher and are above $3 a gallon in some areas.
President Bush’s job-approval rating, meanwhile, is now at 33 percent, the lowest in AP-Ipsos polling.
One of the areas where consumers expressed the most angst in May involved their expectations about the next six months – including conditions where they live or work and their own financial positions.
Economists blamed most of the drop in the May expectations measure to concern that energy prices could move even higher.