Urban consumers turned more pessimistic about the economy, jobs and spending in May, while professional forecasters lowered India's growth outlook, pointing to emerging signs of softer demand and weakening sentiment, according to Reserve Bank of India (RBI) surveys released on June 05.The RBI's Urban Consumer Confidence Survey (UCCS) showed consumer confidence for the current period fell for the third consecutive round, with the Current Situation Index (CSI) declining to 90.7 in May from 95.7 in March. The Future Expectations Index (FEI) also dropped to 118.7 from 120.2, its lowest level since September 2023. The survey was conducted between May 2 and May 11 across 19 cities and covered 6,086 respondents.Also Read: Consumer goods majors eye stronger sales as inflation pushes both volumes and prices"Consumer confidence for the current period declined for the third successive round with the Current Situation Index (CSI) going down to 90.7 from 95.7 in the previous round," RBI said. It added that confidence for the year ahead, though still optimistic, weakened and the FEI "dropped by 1.5 points to 118.7 which is the lowest since September 2023."The findings come alongside the RBI's 100th Survey of Professional Forecasters, which cut India's real GDP growth forecast for 2026-27 to 6.5% from 6.9%, reflecting growing caution over the economic outlook.Households reported a worsening view of current economic conditions. The net response on the general economic situation deteriorated to minus 16.5 in May from minus 8.6 in March, while one-year-ahead expectations eased to 19.5 from 23.1. Employment sentiment also weakened, with the net response on current employment conditions falling to minus 14.4 from minus 9.1, and future expectations declining to 21.8 from 25.2.Inflation remained a major concern. According to the survey, 91.6% of respondents said prices had increased over the past year, up from 89.1% in March. More households also felt the pace of price increases had accelerated, with the net response on inflation worsening to minus 77.1 from minus 72.2.Income growth perceptions weakened as well. The net response on current income fell to 0.9 from 3.0 in March, while one-year-ahead income expectations moderated to 47.1 from 48.4.Consumer spending also lost momentum. The net response on overall spending eased to 74.0 from 78.4, while future spending expectations fell to 76.6 from 81.2. RBI said the weakening was "primarily driven by ebbed sentiment on discretionary expenditure."Notably, sentiment on non-essential spending turned negative. The net response on current discretionary spending slipped to minus 0.8 in May from positive 0.8 in March, suggesting households are becoming more cautious about purchases beyond essentials. Spending on essential items, however, remained relatively resilient.The RBI surveys indicate that while consumers remain optimistic about the year ahead, concerns around inflation, employment and income are weighing on sentiment, even as economists turn more cautious on India's growth prospects.