Consumer Confidence Slides in May

The Conference Board's index sinks to its worst level in roughly 16 years.
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The Conference Board's consumer-confidence index sank to its worst level in roughly 16 years in May and registered an even heftier decline than analysts were expecting.

Overall, the index fell to 57.2 this month from 62.8 in April and came in short of the consensus estimate of 60. The last time the measure was that low was in 1992.

Consumer attitudes have taken a hit as the housing market continues to struggle, while at the same time prices for gasoline and food have been rising sharply.

A separate report showed that new-home sales

surprisingly climbed in April

, but stayed near their lowest point since 1991, while another survey indicated housing prices in the first quarter dropped 14.1% year over year.

When consumer confidence worsens, it can mean trouble ahead for the economy, as consumer spending accounts for nearly 70% of total activity.

The present conditions component of the confidence report slid to 74.4 from 81.9 the previous month. The expectations index dropped to 45.7 from 50.

This article was written by a staff member of TheStreet.com.