Consumer sentiment for the U.S. was revised higher to 69.1 in May, according to the University of Michigan survey of consumers. This revision is up from the preliminary reading of 67.4 but remains below April’s 77.2, marking the lowest reading in six months.
By the numbers:
- 69.1: Revised consumer sentiment index for May.
- 67.4: Preliminary reading for May.
- 77.2: Consumer sentiment index for April.
- 6-month low: Current sentiment level, despite the upward revision.
Economists’ expectations: Analysts had projected a much smaller upward revision to 67.5, making the actual increase a surprise, albeit still indicative of declining sentiment.
Details:
- Current economic conditions: The index fell to 69.6 in May.
- Consumer expectations: The index dropped to 68.8 in May.
What They’re Saying: Joanne Hsu, Director of Surveys of Consumers, said consumer are worried about labor markets and rates. “Consumers expressed particular concern over labor markets; they expect unemployment rates to rise and income growth to slow. The prospect of continued high interest rates also weighed down consumer views. These deteriorating expectations suggest that multiple factors pose downside risk for consumer spending.”
- Despite these concerns, Hsu noted a positive trend: “Sentiment remains almost 20% above a year ago and about 40% above the all-time historic low in June 2022, reflecting how much consumer views have improved as inflation eased.”
Why It Matters: While the upward revision offers a slightly brighter picture, the sentiment index’s decline to a six-month low signals growing consumer anxiety over the labor market and interest rates. These concerns could have significant implications for future consumer spending and overall economic growth.
