US consumer confidence has fallen to a record low as Americans worry about the impact of rising prices on their personal finances, driven by the ongoing war in Iran and trade tensions. The University of Michigan's index of consumer sentiment dropped to 48.2 in May, down from 49.8 in April, which was itself the lowest on record. The index of current economic conditions fell by 9% month-on-month, with about one-third of consumers spontaneously mentioning gasoline prices and 30% citing tariffs.
Despite the gloomy consumer outlook, the US economy added 115,000 jobs in April, beating forecasts of a 62,000 increase, according to the Bureau for Labor Statistics. The unemployment rate remained steady at 4.3%. However, revisions to previous months showed that employment in February and March combined is 16,000 lower than previously reported. Job gains were concentrated in healthcare, transportation, retail, and social assistance.
In the UK, the pound gained ground after Labour leader Keir Starmer pledged not to resign following poor local election results. The cost of government borrowing fell as bond prices rose. Global food prices rose for the third consecutive month, with vegetable oils, meat, and cereals all increasing in April. UK house price growth halved, with prices falling slightly in April.
Toyota reported a £3bn hit from costs related to the war in Iran, as prices of parts and materials soared and sales dropped. Britain's FTSE 100 index posted its third weekly loss, closing down 0.4% at 10,233.07 points. The Financial Conduct Authority provided an update on legal challenges to its £9.1bn car finance compensation scheme, including a claim that the payout plan breaches lenders' rights under the Human Rights Act 1998.
