U.S. consumer sentiment fell to a record low in early May, as rising gasoline prices and broader cost pressures weighed heavily on household finances, according to the University of Michigan’s latest survey.
The university’s Consumer Sentiment Index dropped to 48.2 in preliminary May results, down from 49.8 in April.
The decline shows that many Americans remain deeply worried about the cost of living, even as some inflation expectations eased slightly. The survey’s measure of current economic conditions fell to 47.8, a 9% drop from April, while the expectations index edged up slightly to 48.5.
Gasoline prices were a major factor behind the weak reading. Joanne Hsu, director of the University of Michigan’s Surveys of Consumers, said households continued to feel pressure from higher prices, especially at the pump. The survey also found that about one-third of consumers spontaneously mentioned gasoline prices, while around 30% mentioned tariffs.
The data suggests that consumers are not only worried about everyday expenses, but also about major purchases. The University of Michigan said buying conditions for big-ticket items worsened as concerns over high prices increased. Real income expectations also continued to weaken after beginning to decline in March.
Inflation expectations moved slightly lower, offering a small positive sign in an otherwise gloomy report. Consumers now expect prices to rise 4.5% over the next year, down from 4.7% in April. Longer-term inflation expectations also eased to 3.4%, compared with 3.5% last month.
