U.S. consumer sentiment declined in May to its lowest level since 2011 as persistent concerns
over inflation dampen Americans’ views of the economy.
The University of Michigan’s consumer sentiment index fell to 59.1 from 65.2 in April. The figure
was lower than all estimates in a survey of economists, which called for a median reading of 64.
A gauge of current conditions dropped to 63.6, the lowest level in 13 years, while a measure of
future expectations declined 6.2 points, erasing most of April’s gains.
Consumers said they expect prices to rise 5.4% over the next year, holding at a four-decade
high for the third month in a row. They expect prices will rise at an annual rate of 3% over the
next five to 10 years, also unchanged from April.
Americans’ view of their current financial situation compared to a year ago is at its lowest
reading since 2013, according to the University of Michigan survey. Nearly half of respondents
don’t expect their incomes to keep pace with inflation over the coming 12 months.
U.S. consumer prices rose 8.3% in April from a year ago - a slight moderation from the prior
month, but still among the fastest rates in decades, government data showed.
At the same time, gas prices have jumped to new highs in recent weeks and borrowing costs for
home and student loans are on the rise as the U.S. Federal Reserve hikes interest rates to rein
in inflation.
Still, Americans continue to benefit from a strong labor market as record job openings fuel
higher wages.
