WASHINGTON--Consumer sentiment unexpectedly fell in early May, with the index dropping to 50.8 from 52.2 in April—marking the second-lowest reading on record, surpassed only by June 2022.
The latest University of Michigan survey released Friday shows inflation expectations worsened. One-year inflation projections climbed to 7.3%, up from 6.5% the previous month, while long-term expectations edged up to 4.6% from 4.4%.
"While most index components were little changed, current assessments of personal finances sank nearly 10% on the basis of weakening incomes. Tariffs were spontaneously mentioned by nearly three-quarters of consumers, up from almost 60% in April; uncertainty over trade policy continues to dominate consumers’ thinking about the economy," the survey states.