In May, U.S. consumer sentiment dropped to 50.8, the second-lowest ever recorded, from 52.2 in April, primarily due to rising inflation expectations and concerns about trade policy. Nearly 75% of respondents mentioned tariffs, indicating their significant influence on consumer perceptions. The director of the survey, Joanne Hsu, noted that temporary tariff reductions are insufficient to stabilize consumer confidence for future planning. Despite heightened concerns about inflation, recent data showed limited price increases, suggesting a complex relationship between sentiment and spending behavior among consumers.
The drop in consumer sentiment to 50.8 reflects growing concerns over tariffs and inflation, with three-fourths of respondents mentioning trade policy in their responses.
Joanne Hsu remarked that temporary pauses in tariffs are unlikely to restore consumer confidence, as trade policy instability leaves consumers uncertain about planning for the future.
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