Consumer Sentiment Declines 12.7% in Early May, Up 14.2% YOY
Ann Arbor, MI, May 10, 2024-Consumer sentiment declined 12.7% in early May to 67.4, according to preliminary estimates from the University of Michigan Survey of Consumers.
This represents a 14.2% increase year over year.
“Consumer sentiment retreated about 13% this May following three consecutive months of very little change,” says Survey of Consumers director Joanne Hsu. “This 10 index-point decline is statistically significant and brings sentiment to its lowest reading in about six months. This month’s trend in sentiment is characterized by a broad consensus across consumers, with decreases across age, income, and education groups. Consumers in western states exhibited a particularly steep drop. While consumers had been reserving judgment for the past few months, they now perceive negative developments on a number of dimensions. They expressed worries that inflation, unemployment and interest rates may all be moving in an unfavorable direction in the year ahead.
“Year-ahead inflation expectations rose from 3.2% last month to 3.5% this month, remaining above the 2.3-3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations inched up, from 3.0% last month to 3.1% this month. Although they have been within the narrow 2.9-3.1% range for 30 of the last 34 months, long-run inflation expectations remain elevated relative to the 2.2-2.6% range seen in the two years pre-pandemic.”