Overview
- The University of Michigan’s final May reading, released May 22, put the Consumer Sentiment Index at 44.8 after a downward revision from a preliminary 48.2, completing three straight monthly declines.
- Both subindexes fell to historic lows with Current Economic Conditions near 45.8 and the Index of Consumer Expectations around 44.1, showing worsening views of today’s economy and the six‑month outlook.
- Year‑ahead inflation expectations rose to roughly 4.8 percent and long‑run expectations to about 3.9 percent, a jump that could influence Federal Reserve thinking on policy.
- Joanne Hsu and the survey found 57 percent of respondents say high prices are eroding their finances, about one‑third singled out gasoline, and declines were largest for lower‑income and non‑college households while Independents and Republicans fell most among partisan groups.
- The drop raises the risk of weaker consumer spending, which drives about two‑thirds of U.S. GDP, so markets and policymakers will watch upcoming spending data, the Conference Board reading, and June’s preliminary Michigan number for signs the trend continues.