Consumer sentiment plunges to record low as inflation trends up again
Consumer sentiment has reached a record low due to rising inflation driven by increasing energy prices. The University of Michigan Consumer Sentiment Index reported a drop to 44.8 in May, marking a significant decline from previous months. This decline reflects growing concerns over the cost of living, particularly among lower-income consumers.
- ▪Consumer sentiment fell to 44.8 in May, down from 49.8 in April.
- ▪This is the lowest sentiment reading since the Great Recession and the COVID-19 pandemic lockdowns.
- ▪Inflation expectations have also increased, with year-ahead expectations rising from 4.7% to 4.8%.
- ▪The unemployment rate remains low at 4.3%, but consumer sentiment is not improving despite positive economic indicators.
- ▪Prices have risen about 25% since January 2020, impacting household finances significantly.
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Consumer sentiment has fallen to the lowest it has ever been amid a renewed wave of inflation resulting from spiking energy prices. Consumer sentiment fell to 44.8, down from 49.8 in April, according to a preliminary reading of the University of Michigan Consumer Sentiment Index for May — dropping lower than it did during the worst of the Great Recession and when the entire country was locked down during the COVID-19 pandemic. Recommended Stories Trump administration expands finance-focused approach to sway illegal immigrants to self-deport Mamdani spars with Bezos over tax cuts helping teachers: ‘Beg to differ’ House updates institutional investor provision in bipartisan housing bill ‘VIBEPRESSION’: WHY CONSUMER SENTIMENT IS HITTING RECORD LOWS Consumer sentiment is now down 10% from a…
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