The University of Michigan’s May consumer survey delivered a jarring message to Wall Street and policymakers: sentiment among American consumers has plunged to the lowest levels since June 2020, while expectations for inflation surged to heights last seen during the early 1980s.
The preliminary Consumer Sentiment Index dropped to 50.8 in May, down from 52.2 in April and missing economists’ forecasts of 53.4. The gauge is now 27% lower than it was a year ago, signaling deepening anxiety among households despite the recent 90-day pause on tariffs.
Expectations Sink To 1980 Lows, Inflation Fears Echo 1981
The subindex for Current Economic Conditions declined to 57.6 from 59.8 in April, while the Consumer Expectations subindex – a measure of forward-looking sentiment – dipped further from 47.3 to 46.5.
That …