WASHINGTON – American consumers are feeling more pessimistic about the economy than ever before, with confidence levels dropping to an unprecedented low point in early May, according to new research released Friday.
Data from the University of Michigan’s consumer survey revealed that their Consumer Sentiment Index plummeted to 48.2 this month, down from April’s final measurement of 49.8. This marks the lowest reading since the survey began tracking consumer attitudes. Financial experts had predicted the index would decline to 49.5.
Rising fuel costs are putting serious pressure on family budgets and reducing what Americans can afford to buy, the research indicates.
“Consumers continue to feel buffeted by cost pressures, led by soaring prices at the pump,” explained Joanne Hsu, who oversees the consumer survey program. “Middle East developments are unlikely to meaningfully boost sentiment until supply disruptions have been fully resolved and energy prices fall.”
The study also tracked what Americans expect inflation to look like going forward. Survey participants predicted prices will rise 4.5% over the coming year, which represents a decrease from April’s projection of 4.7%. Looking further ahead, consumers anticipate inflation will reach 3.4% over the next five years, slightly lower than last month’s forecast of 3.5%.
