U.S. Consumer Sentiment Fell Back to Decade-Lows in May -- University of Michigan
By Xavier Fontdegloria
Sentiment among American consumers declined in May to the lowest
level in more than a decade, erasing April's gains, as fears about
The final reading of the index of consumer sentiment released
Friday by the University of Michigan stood at 58.4, down from the
preliminary estimate of 59.1 and below the 65.2 level registered in
Economists polled by The Wall Street Journal expected the index
to remain unchanged from the preliminary reading.
Consumer confidence stands at its lowest level since August
2011. However, souring Americans' moods have not caused for now a
pullback in consumer spending, a major driver for U.S. economic
Consumer spending rose by 0.9% in April, posting a fourth
straight month of gains, according to data from the Commerce
Department released Friday. A strong labor market, increasing wages
and savings are seen holding up households' consumption despite
high inflation, economists say.
"This recent drop was largely driven by continued negative views
on current buying conditions for houses and durables, as well as
consumers' future outlook for the economy, primarily due to
concerns over inflation," said Joanne Hsu, the survey's
In May, consumers expect prices to rise by 5.3% for the year
ahead, down from the 5.4% advance recorded in April. This is the
first time that inflation expectations for the next 12 months have
eased since December 2021.
For the next five years, Americans expect inflation to stand at
3%, unchanged from the previous month, the data showed.
The index measuring Americans' assessment of the current
economic conditions fell to 63.3 from 69.4 in April, declining
slightly compared with the preliminary early-month reading of
The index of consumer expectations, which reflects the balance
of respondents anticipating improved business conditions in the
next six months, fell to 55.2 from 62.5 the previous month. The
preliminary estimate was 56.3.
Consumers expressed less pessimism over future prospects for
their personal finances than over future business conditions, with
less than one quarter of consumers expecting to be worse off
financially a year from now, Mr. Hsu said.
"A stable outlook for personal finances may currently support
consumer spending," she said. "Still, persistently negative views
of the economy may come to dominate personal factors in influencing
consumer behavior in the future."
Write to Xavier Fontdegloria at email@example.com
(END) Dow Jones Newswires
May 27, 2022 10:32 ET (14:32 GMT)
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