ANN ARBOR - The May decline in consumer confidence was not due to the dismal state of the economy during the 1st quarter, which had the weakest pace of GDP growth in three years. Consumers thought the harsh winter weather was mainly responsible. A much greater impact on consumer sentiment would result if the economy did not post a strong rebound in the months ahead. Importantly, the economy was anticipated to be strong enough to produce more jobs in the year ahead. The main concern expressed by consumers involved dismal prospects for wage growth. Tiny wage gains meant that nearly half of all households anticipated declines in inflation-adjusted in-comes during the year ahead. Overall, the data is consistent with gains in real consumer expenditures of 2.5% during 2014.

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