The final May reading of the UMich Index of Consumer Sentiment held steady at 52.2 in May, unchanged over the month but down -24.5% YoY, ending a four-month streak of sharp declines.

• The Current Economic Conditions index fell -1.5% MoM to 58.9 and is down -15.4% YoY, reflecting weaker personal finances and stagnating incomes.
• The Index of Consumer Expectations rose 1.3% MoM to 47.9 but remains down -30.4% YoY.
• Improved sentiment after mid-May was linked to the temporary pause on China tariffs, while the tax and spending bill had little effect on consumer views.

Year-ahead inflation expectations ticked up to 6.6% in May from 6.5% in April, still high but the smallest monthly increase since the 2024 election.

• Long-run inflation expectations eased to 4.2% from 4.4% in April, marking the first monthly decline since December 2024.
• The final May readings of inflation expectations are significantly different than the preliminary reading: 1-year final May reading is 6.6%, down from 7.3% in the early May reading, 5-year final May reading is 4.2%, down from 4.6% in the early May reading.