Americans grew much gloomier about the economy in May, causing a critical measure of consumer confidence to suffer its biggest decline in eight months and ending a period of steady optimism.
Worries about jobs, housing and the stock market rattled consumers, even though gas prices are falling. The latest figures suggest Americans will need to see more encouraging economic signs before their concerns start to dissipate.
The Conference Board, a private research group, reported Tuesday that its Consumer Confidence Index fell to 64.9, down from a revised 68.7 in April. Analysts had expected it to climb to 70.
The May figure, which represents the biggest drop since October, when the measure fell about 6 points, is now at its lowest level since January.
Americans are still worried about slow hiring, declining home values, the stock market and a worsening European economy that they fear will negatively affect the U.S.
"Consumers were less positive about current business and labor market conditions, and they were more pessimistic about the short-term outlook," said Lynn Franco, director of economic indicators at the Conference Board.
Consumer confidence is widely watched because consumer spending accounts for 70 percent of economic activity. May's figure is significantly below the 90 reading that indicates a healthy economy. The measure hasn't been near that level since December 2007. But the latest reading is still well above the 40 figure reached last October and the all-time low of 25.3 in February 2009.
The consumer confidence measure has zigzagged so far this year, dropping in January, rising in February and holding nearly steady after that. Analysts were hoping a slight rise in May would give some credence to the idea that the economy is stabilizing.
Instead, the data, which was based on a survey conducted from May 1 through May 16 with about 500 randomly selected people nationwide, suggests that "the pace of economic growth in the months ahead may moderate," Franco said.
Mark Vitner, an economist at Wells Fargo, said May's reading is disappointing but consistent with the sluggish recovery so far.
"In some ways, it's a microcosm of the whole economic recovery," he said. "Every once in a while hopes are raised that things are getting better, and then the bottom seems to fall out again."
Analysts say the inconsistent job market is preventing Americans from being more upbeat.
A much sunnier Thomson Reuters/University of Michigan index of consumer sentiment came out Friday. That index, which is also considered a measure of consumer confidence, jumped to 79.3 in May for its best reading since October 2007 -- two months before the recession began.
The biggest reason for the difference, economists said, was probably timing: The Conference Board finished its survey May 16, while the University of Michigan survey continues throughout the month. That means the Conference Board didn't capture all the recent declines in gas prices, and it finished just as worries about Europe's financial crisis hit a crescendo, ahead of an international summit.