U.S. Consumer Sentiment Tumbles on Rising Inflation

Consumer confidence the United States declined in the early days of the month due to the rise in the inflation rate, according to data by the University of Michigan released on Friday.

The Consumer Sentiment Index rose decreased by 6.2% to 82.8 from 88.3 in April, but rose by 14.5% on an annual basis from its level at 72.3 in May 2020, supported by the recovery from the coronavirus pandemic.

The Current Economic Conditions gauge also fell by 6.6% to 90.8 in May from 97.2 in the previous month, but increased by 10.3% on an annual basis compared with a reading of 82.3 in the corresponding month of last year.

Meanwhile, the Index of Consumer Expectations fell by 6.2% to 77.6 from 82.7 in April, but on a yearly basis gained 17.8% compared with a reading of 65.9 in the same month of the previous year.

Rising inflation led to weaker expectations for real income, reaching their lowest level in five years.