Consumer sentiment fell again in May amid inflation worries, tariff uncertainty
Federal Reserve Chairman Jerome Powell discussed how the central bank’s policy framework can adapt to the most volatile inflation and the most common supply shocks. (Credit: Bloomberg)
The feelings of consumers in the United States continued to decline in May, as Americans’ expectations about future inflation rose and concerns continued about the influence of president Donald Trump’s tariff.
On Friday, consumer surveys at the University of Michigan released consumer morale, which decreased to 50.8 in a preliminary reading in May after a final reading of 52.2 in April. The economists of Reuters expected the index to rise to 53.4.
The latest numbers leave consumer morale reading 30 % since January 2025 after five months of declines. Reading 50.8 is the second harshest reading ever, after June 2022, the month that the last inflating cycle reached its climax.
“The customs tariff was automatically mentioned by nearly three quarters of consumers, an increase of approximately 60 % in April,” said Joan Hazou, director of consumer.
Jimmy Damon says the recession is still a possibility: “I will not take it out of the table at this stage.”
The consumer feeling fell for the fifth consecutive month in May. (Hum Images / Universal Images Group via Getty Images / Getty Images)
Two days after Trump announced a deal with China to temporarily reduce the definitions for 90 days and reduce fees on Chinese goods from 145 % to 30 %, while the Chinese customs tariffs on American exports were reduced from 125 % to 20 %.
Temporary relief for customs tariffs aims to give time negotiations on a long -term deal.
“Many surveyed measures have shown some signs of improvement after limiting China’s temporary tariff, but these initial increases were very small so that the total image can not be changed – consumers continue to express simple views about the economy,” HSU pointed out.
Jpmorgan reduces the possibility of stagnation after Trump’s introductory truce with China
Federal Reserve Chairman Jerome Powell said the central bank will monitor the signs of high prices caused by customs tariffs. (Olivier Douliery / AFP via Getty Images / Getty Images)
The report said that the current assessments of personal finance decreased by approximately 10 % due to poor income.
Consumer expectations for inflation next year increased to 7.3 % this month, up from 6.5 % in April. This increase occurred between both Democrats and the Republicans surveyed. The inflation expectations of 7.3 % for one year are the highest since April 1981.
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Long -term inflation expectations rose to 4.6 % in May, up from 4.4 % per month, due to a greater increase among Republican respondents.
2025-05-16 20:42:00
