University of Michigan Releases Preliminary Results of Its Consumer Sentiment Index for May

On Friday, the University of Michigan released the preliminary results of its Surveys of Consumers for May.

• The Index of Consumer Sentiment fell to a reading of 48.2 in May, down 3.2% from 49.8 in April. Year-over-year, the index was down 7.7% from 52.2 in May 2025.
• Current Economic Conditions fell to a reading of 47.8 in May, down 9.0% from 52.5 in April and 18.8% from 58.9 in May 2025.
• The Index of Consumer Expectations rose to 48.5 in May, up 0.8% from 48.1 in April and 1.3% from 47.9 in May 2025.

In remarks accompanying the release, Surveys of Consumers Director Joanne Hsu said:

“Consumer sentiment was essentially unchanged this month, coming in a scant 1.6 index points below April’s reading and comparable to the trough reached in June 2022. While the expectations index inched up, current conditions fell back about 9%, owing to a surge in concerns about high prices both for personal finances, as well as buying conditions for major purchases. Real income expectations continued a decline that began in March. About one-third of consumers spontaneously mentioned gasoline prices, and about 30% mentioned tariffs. Taken together, consumers continue to feel buffeted by cost pressures, led by soaring prices at the pump. Middle East developments are unlikely to meaningfully boost sentiment until supply disruptions have been fully resolved and energy prices fall.

Year-ahead inflation expectations softened a touch from 4.7% last month to 4.5% this month. The current reading still substantially exceeds the 3.4% reading seen in February prior to the start of the Iran war, along with all 2024 readings and the 2.3–3.0% range seen in the two years pre-pandemic. Long-run inflation expectations inched down from 3.5% in April to 3.4% in May. In 2024, values ranged between 2.8% and 3.2%, while in 2019–20, they were consistently below 2.8%.”