Thu, 05 Oct 2023

UM consumer sentiment index falls in May

27 May 2023, 05:05 GMT+10

CHICAGO, May 26 (Xinhua) -- The Consumer Sentiment Index released Friday by the University of Michigan (UM) Surveys of Consumers fell to 59.2 in May, down from 63.5 in April and above last May's 58.4.

The Current Index fell to 64.9 in May, down from 68.2 in April and above last May's 63.3. The Expectations Index fell to 55.4, down from 60.5 in April and above last May's 55.2.

The year-ahead economic outlook plummeted 17 percent in May from last month. Long-run expectations slid by 13 percent as well, indicating that consumers are concerned any recession to come may cause lasting pain.

About 52 percent of consumers reported that the government is doing a poor job with economic policy, the worst reading since last July. Independents registered the strongest drop, consistent with mounting frustration over the standoff between Democrats and Republicans.

About 80 percent of consumers said it was a bad time to buy houses, compared with 73 percent in April and 77 percent a year ago. About 54 percent of consumers reported worries about high prices, more than triple the historical average.

In addition, a growing share of consumers saw high interest rates as a negative factor for buyers and sellers alike. Selling conditions for houses worsened in May, with 41 percent of consumers reporting it was a bad time to sell, up from 38 percent last month and 17 percent a year ago. With 67 percent of consumers expecting interest rates to continue to rise in the year ahead, buying and selling conditions are unlikely to improve anytime soon.

"High inflation continues to erode consumers' living standards, and their confidence in the economy remains woefully negative," said UM economist Joanne Hsu, director of the Surveys of Consumers.

The Surveys of Consumers is a rotating panel survey based on a nationally representative sample that gives each household in the coterminous United States an equal probability of being selected. Interviews are conducted throughout the month by telephone.

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