Consumer confidence dipped in May, down from 109.8 in April 2006 to 103.2 during the month. Despite the negative news, May’s figure was still higher than analysts’ expectations. May’s Consumer Confidence figure is only the second decrease during a seven month rebound that has been ongoing since the aftermath of the 2005 hurricane season that wreaked havoc in the Gulf of Mexico.

Conference Board director Lynn Franco noted that “Consumer confidence, which reached a four-year high in April, lost ground in May. Apprehension about the short-term outlook for the economy, the labor market and consumers’ earning potential has driven the Expectations Index down to levels not seen since the aftermath of the hurricanes last summer.” The Expectations Index, to which Franco referred, measures consumers’ general outlook. The index dipped from 92.3 in April to 83.7 in May.

The news, while indicative of some worries about jobs, is even more problematic for retailers, who have been slowing hiring over the past month. Retail sales have slowed in May. A poll conducted for the National Retail Federation shoed that 76% of consumers believe that fluctuating gas prices have affected their spending habits. A year ago, only 67.2% felt that way, indicating that rising fuel costs are finally pushing consumers to a point where they will make changes and concessions due to the increases.

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