Consumer confidence in the United States took a small dip this month. High gas prices and persistent inflation are key factors affecting this trend. At the same time, stock prices have been approaching record highs.

The Conference Board reported a 0.7-point drop in its consumer confidence index, bringing it to 93.1 in May. This decline follows a period of three months of growth. The University of Michigan’s separate measure of consumer sentiment also hit a record low this month.

Inflation has become a pressing issue. Increases in gas and food prices are major contributors, outpacing wage growth and straining purchasing power. Many Americans are expressing dissatisfaction with President Trump’s economic policies, as shown in recent polls. This sentiment could impact the upcoming midterm elections.

Gasoline prices have surged. The national average soared to $4.49 per gallon from $2.98 at the end of February. In May, prices have remained around or above $4.50 per gallon.

The Conference Board added special survey questions this month to assess the impact of rising prices. Results showed that most Americans are adjusting their spending habits, with two-thirds of respondents cutting back. Many are delaying major purchases and reducing daily expenses.

Other areas where consumers plan to reduce spending include clothing, shoes, hobbies, and toys. Inflation reached 3.8% in April, a peak not seen in three years, and significantly higher than the Federal Reserve’s 2% target.

Grocery prices have also climbed, likely due to increased shipping costs. Beef prices specifically have spiked as drought and other factors have decreased cattle herds. This inflation is decreasing average Americans’ real income. Adjusted average hourly earnings fell in April compared to the previous year, marking the first drop in three years.