The early May reading of the UMich Index of Consumer Sentiment is 50.8, a drop of -2.7% MoM and -26.5% YoY and below expectations of a slight increase to 53.4.

• The Current Economic Conditions index fell -3.7% MoM, and the Index of Consumer Expectations fell -1.7% MoM.
• Sentiment is now down almost -30% since January 2025. Slight increases in sentiment this month for independents were offset by a 7% decline among Republicans.
• While most index components were little changed, current assessments of personal finances sank nearly 10% on the basis of weakening incomes.

Year-ahead inflation expectations surged again, up from 6.5% last month to 7.3% in May. This month’s rise was seen among Democrats and Republicans alike.

• Long-run inflation expectations lifted from 4.4% in April to 4.6% in May, reflecting a particularly large monthly jump among Republicans.
• The final release for May will reveal the extent to which the May 12 pause on some China tariffs leads consumers to update their expectations.