U.S. Consumer Sentiment At Decade Low As Inflation Rises

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.

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