By Joshua Kirby
U.S. consumer sentiment is plunging against a backdrop of stubbornly high inflation and slowing economic momentum, a survey showed Friday.
The University of Michigan's consumer-confidence survey dropped sharply to 67.4 in mid-May from 77.2 at the end of last month. Economists had expected the survey to show a gentler downtick, according to a poll compiled by The Wall Street Journal. The drop suggests sentiment is at its lowest in a half-year, reversing much of the gains made since the middle of 2023.
"This ... decline is statistically significant," said Joanne Hsu, director of the survey. The drop is notable for showing similarly worsening confidence among all age, income and education groups, Hsu said.
"While consumers had been reserving judgment for the past few months, they now perceive negative developments on a number of dimensions," she said.
Consumers quizzed by the survey expressed mounting concerns about price rises, as well as unemployment and interest rates as the U.S. increasingly faces the unwelcome prospect of a high inflation and high-rate environment. Gross domestic product rose less expansively than had been expected in the first months of the year, creating a headache for policymakers also struggling to bring inflation down to target.
Write to Joshua Kirby at joshua.kirby@wsj.com; @joshualeokirby
(END) Dow Jones Newswires
05-10-24 1030ET
