Source: Sharecast
The University of Michigan's closely watched index of consumer sentiment unexpectedly fell to 50.8 in May, down from 52.2 in April and well below the 53.4 pencilled in by economists.
This was 26.5% lower than the same month the year before (69.1) and the lowest level for the gauge since June 2022.
Following four straight months of steep declines, sentiment has now fallen nearly 30% since January.
The index tracking consumers' assessments of current economic conditions fell to 57.6 from 59.8, while the consumer expectations index dropped to 46.5 from 47.3, with both measures firmly below last year's levels.
"Tariffs were spontaneously mentioned by nearly three-quarters of consumers, up from almost 60% in April; uncertainty over trade policy continues to dominate consumers’ thinking about the economy," the University of Michigan said in its report.
It's important to note that the survey ran between 22 April and 13 May, closing just two days after the agreement between the US and China on a temporary reduction of trade duties.
"Many survey measures showed some signs of improvement following the temporary reduction of China tariffs, but these initial upticks were too small to alter the overall picture – consumers continue to express somber views about the economy," the report said.
Consumers' expectations for inflation in 12 months' time increased to 7.3% in May, from 6.5% last month, while long-run inflation projections rose to 4.6% from 4.4%.
