Ann Arbor, MI, May 13--Consumer sentiment as measured by the University of Michigan's preliminary index dropped unexpectedly to 85.3 in May from 87.7 in April. It was the fifth straight monthly decline in the index, as gasoline prices held near a record.
Economist had forecast a reading of 88.2 for the month.
While higher prices at the pump are weighing on sentiment, people are still spending. Retail sales in April rose by the most in seven months, suggesting consumer spending is providing a spark for the economy, a government report showed yesterday.
The current conditions index, which reflects Americans' perception of their financial situation and whether it's a good time to buy big-ticket items, dropped to 103.3 in May from 104.4 in April, when it reached its lowest since October of last year.
The expectations index, based on optimism about the next one to five years, declined to 73.7.
