Revised data released by the University of Michigan on Friday showed consumer sentiment in the U.S. deteriorated by even more than previously estimated in the month of May.
The report showed the consumer sentiment index for May was downwardly revised to 58.4 from the preliminary reading of 59.1. Economists had expected the index to be unrevised.
The consumer sentiment index is even further below the April reading of 65.2, slumping to its lowest level since hitting 55.8 in August of 2011.
“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 Surveys of Consumers Director Joanne Hsu.
“At the same time, consumers expressed less pessimism over future prospects for their personal finances than over future business conditions,” she added. “Less than one quarter of consumers expected to be worse off financially a year from now.”
The report showed the current economic conditions index slid to 63.3 in May from 69.4 in April, while the index of consumer expectations also tumbled to 55.2 in May from 62.5 in April.
With regard to inflation, one-year inflation expectations edged down to 5.3 percent in May from 5.4 percent in April. Five-year inflation expectations remained unchanged at 3.0 percent.
“Looking into the long term, a majority of consumers expected their financial situation to improve over the next five years; this share is essentially unchanged during 2022,” said Hsu.
“A stable outlook for personal finances may currently support consumer spending,” she continued. “Still, persistently negative views of the economy may come to dominate personal factors in influencing consumer behavior in the future.”
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