After holding steady for the past three months, consumer sentiment is falling. According to preliminary data from the University of Michigan consumer survey released Friday, sentiment fell 13% in May compared with a month earlier, as Americans felt the weight of higher prices.
It's the lowest consumer sentiment reading in six months.
Declining sentiment was reported across all ages, incomes and education groups, with consumers in the western part of the country showing an especially steep drop.
“While consumers had been reserving judgment for the past few months, they now perceive negative developments on a number of dimensions,” University of Michigan Surveys of Consumers Director Joanne Hsu said in a statement. “They expressed worries that inflation, unemployment and interest rates may all be moving in an unfavorable direction in the year ahead.”
Survey respondents said they expect inflation to increase 3.5% in the year ahead and 3.1% in the long term.
“People are in an uncomfortable spot right now. Prices are high, and we’re likely still getting accustomed to that,” NerdWallet Data Analyst Elizabeth Renter said in a statement responding to the May sentiment numbers. “It’s important to point out that the measure is still 14% higher than this time last year, and this early read will change when the final data is released in a few weeks.”
The preliminary results were released one day after the Labor Department reported weekly jobless claims were their highest in more than eight months and one week after the government reported U.S. job growth slowed more than expected in April.