Consumer Sentiment Falls to Lowest Level in More Than a Decade
May 12, 2022
Concerns about inflation have U.S. consumers feeling worse than they have in more than a decade.
The University of Michigan’s consumer sentiment index dropped to 59.1 from 65.2 in April, the lowest level since 2011.
The drop reversed a short-lived uptick seen in April. The month’s reading was lower than all estimates in a Bloomberg survey of economists, which called for a modest decline to 64.
Consumers’ assessment of their current financial situation relative to how they felt a year ago dropped to the lowest level in 13 years, with 36% of consumers citing inflation as the main cause of their worsening situations.
Nearly half of the consumers surveyed said they do not expect their incomes to keep pace with inflation over the next 12 months.
Worse still, Americans’ assessment of the conditions for buying durable goods–meaning big-ticket items like furniture and appliances–is the lowest ever in data that goes back to 1978.
Economists are optimistic that the annual rate of inflation may have peaked in April, but between ongoing supply chain issues, lockdowns in China, and the war in Ukraine, prices are expected to remain elevated at least throughout the summer and may continue to have an adverse impact on Americans’ buying decisions.