Pessimism on inflation overshadows optimism on personal finances
May 27, 2022
Contact: Morgan Sherburne, 734-647-1847, [email protected]
Surveys of Consumers, 734-763-5224
ANN ARBOR—After voicing more positive views in April, consumer sentiment fell 10.4% in May, reverting to levels comparable to two months ago, according to the University of Michigan Surveys of Consumers.
Most of this decline was concentrated in expectations for the economy, with the year-ahead outlook dropping 25.8% and the five-year outlook falling 14.3%, said U-M economist Joanne Hsu, director of the surveys.
Furthermore, consumers continued to express negative views on current buying conditions for houses and durables, primarily due to inflation concerns. Overall, the sentiment index settled just one point shy of the March reading.
“While consumers appear confident about their own finances, they continue to voice strong concerns about the economy around them,” Hsu said. “Feelings of personal stability may have supported resilience in spending thus far, but persistently negative views of the economy may come to dominate personal factors in influencing consumer behavior in the future, particularly if global factors, like supply chain issues, or income prospects worsen.”