US consumer sentiment plumbs record lows in May; inflation expectations increase

U.S. consumer sentiment plunged ​to a record ​low in May ‌as surging ​gasoline prices because of the war with Iran fueled anxiety over ‌worsening affordability, a survey showed on Friday. The University of Michigan's Surveys of Consumers said its Consumer Sentiment Index dropped to ‌a final reading of 44.8, an all-time low, from ‌48.2 earlier this month. The index was at 49.8 in April. Economists polled by Reuters had forecast the index unchanged at 48.2.

"The ⁠cost ​of living ⁠continues to be a first-order concern, with 57% of consumers spontaneously mentioning ⁠that high prices were eroding their personal finances, up from ​50% last month," said Joanne Hsu, the director of ⁠the Surveys of Consumers. "Independents and Republicans saw decreases in sentiment, ⁠with both ​groups reaching their lowest readings of the current presidential administration." The survey's measure of consumer expectations for inflation over ⁠the next year rose to 4.8% from 4.7% in ⁠April. Consumers' expectations ⁠for inflation over the next five years shot up to 3.9% from 3.5% last ‌month.

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