High gas prices pushed consumer sentiment to a new low in May.
the University of Michigan‘s Consumer confidence index It fell five points during the month to 44.8, according to consumer surveys. Final results For the month of May.
The reading came a month after the 49.8 reading reported in April that set what was then Lowest level This is the record in the Consumer Confidence Index’s 73-plus year history.
According to the report, consumer sentiment declined for three consecutive months as gas prices rose due to supply disruptions in the Strait of Hormuz.
“The cost of living remains a top concern, with 57% of consumers casually stating that higher prices are eating away at their personal finances, compared to 50% last month,” the consumer survey director said. Joan Hsu He said in the report.
Hsu said there were particularly strong declines in sentiment among low-income consumers and those without college degrees, who are more sensitive to increases in the price of gas and other necessities.
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By political affiliation, both independents and Republicans have seen their sentiments decline to the lowest levels of the current presidential administration, Hsu said. Sentiment among Democrats has changed little.
“It is important for consumers to be concerned that inflation will rise and spread beyond fuel prices, even over the long term,” Hsu said.
The report found that consumers’ inflation expectations for next year rose from 4.7% in April to 4.8% in May. In February, before the Iranian conflict began, this number reached 3.4%.
Long-term inflation expectations rose from 3.5% last month to 3.9% this month. This increase was driven by independents and Republicans, Hsu said.
Conference BoardLatest Consumer confidence indexwhich was released on April 28, found that consumer confidence rose in April despite higher gas prices.
However, in consumers’ written responses about factors affecting the economy, there were more comments about prices, oil and gas, and war in April than in March.
“Consumer confidence rose in April but was little changed overall, despite material concerns about rising gasoline prices as the war in the Middle East pushed up Brent crude prices,” said the Conference Board’s chief economist. Dana M. Peterson He said in a press release.
The Conference Board is scheduled to release its next consumer confidence index on Tuesday (May 26).
