Data released Friday indicates consumers are more skeptical about the economy. May sentiment unexpectedly fell to 88.6, down from 95.9 in April and an 11-year high in January of 98.1. Economists surveyed by the Wall Street Journal projected the May index would stand at 95.5.
“Confidence fell in early May as consumers became increasingly convinced that there would be no quick and robust rebound following the dismal (first) quarter” even if the underperformance was exaggerated by inadequate seasonal adjustments, said Richard Curtin, chief economist at Michigan’s Survey of Consumers that compiles the sentiment index.
So far this year, consumers have not rushed to increase spending. Retail sales were flat in April. The one-year inflation expectations are now 2.9%, up from 2.6% in April. Consumers have chosen to save money or pay down debt.
Source: Fox Business.com
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