Consumer confidence plunges in May

CNBC's Rick Santelli breaks down the data on May's decline in consumer confidence at 64.9 versus 68.7 in April.

By msnbc.com news services

Americans' confidence in the economy in May had its biggest drop in eight months as consumers fretted about slow hiring, a big stock market drop and the global economy, says a private research group.

The Conference Board says its Consumer Confidence Index now stands at 64.9, down from a revised 68.7 in April. It was the biggest drop since October 2011.

Consumers? appraisal of present-day conditions deteriorated in May. Those claiming business conditions are "bad" increased to 34.3 percent from 33.2 percent, while those saying business conditions are "good" decreased to 13.6 percent from 15.5 percent.

"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. "However, consumers were more upbeat about their income prospects, which should help sustain spending."

Economists were expecting a reading of 70, according to a FactSet poll of analysts. The current level is below February's 71.6, which is the highest level it's been in a year.

Consumer confidence is widely watched because consumer spending accounts for 70 percent of economic activity. The measure is significantly below the 90 reading that indicates a healthy economy. But the current level is well above the 40 it hit last October.

But the latest reading is expected to be well above the 40 figure reached last October and the all-time low of 25.3 in February 2009.

The Associated Press contributed to this report.

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