Consumer Sentiment Deteriorates to Lowest Level in a Decade
May 27, 2022
U.S. consumers’ feelings about the economy deteriorated further in late May, falling to the lowest level in a decade as concerns about inflation weigh on households’ spending intentions.
The University of Michigan’s final sentiment index for May decreased to 58.4 from a preliminary reading of 59.1 earlier in the month. That’s down from 65.2 in April.
Households were feeling more pessimistic in both their short- and long-term outlooks for the economy. A gauge of current conditions fell to a 13-year low of 63.3, while a measure of future expectations dropped to 55.2.
Consumers expect prices to rise 5.3% over the next year, nearly a four-decade high. They also expect prices to climb at an annual rate of 3% over the next five to 10 years, well above the Federal Reserve’s 2% inflation target.
The index’s measure of buying conditions for durable goods dropped in May to the lowest level on record.