Surveys of Consumers, University of Michigan

An Explanation: The Index of Consumer Expectations focuses on three areas: how consumers view prospects for their own financial situation, how they view prospects for the general economy over the near term, and their view of prospects for the economy over the long term. Each monthly survey contains approximately 50 core questions, each of which tracks a different aspect of consumer attitudes and expectations. The samples for the Surveys of Consumers are statistically designed to be representative of all American households, excluding those in Alaska and Hawaii. Each month, a minimum of 500 interviews are conducted by telephone.

Trading Economics: The University of Michigan’s Consumer Sentiment Index plunged to a record low of 44.8 in May 2026, revised down from a preliminary 48.2 and marking the third straight monthly decline. Strait of Hormuz supply disruptions continued to push gasoline prices higher.

The cost of living remained the top concern, with 57% of consumers spontaneously citing high prices as eroding their personal finances. Lower-income consumers and those without college degrees posted the steepest declines, as these groups are more sensitive to rising gas and essentials costs.

Politically, Independents and Republicans saw sentiment fall to the lowest levels of the current administration, while Democrats’ sentiment showed little change. Critically, consumers grew increasingly worried inflation would spread beyond fuel prices in the long term. Year-ahead inflation expectations edged up to 4.8% from 4.7%, while long-run expectations climbed to 3.9% from 3.5%. source: University of Michigan

~~~~~~~

“Surveys of Consumers,” University of Michiagn

Surveys of Consumers Director Joanne Hsu

Consumer sentiment fell for the third straight month as supply disruptions in the Strait of Hormuz continue to boost gasoline prices. Sentiment is now just below the previous historical trough seen in June 2022.

The cost of living continues to be a first-order concern, with 57% of consumers spontaneously mentioning high prices were eroding their personal finances, up from 50% last month.

Lower-income consumers and those without college degrees posted particularly strong sentiment declines; these groups are more sensitive to increases in the cost of gas and other essentials.

Independents and Republicans saw decreases in sentiment, with both groups reaching their lowest readings of the current presidential administration.

Meanwhile, sentiment of Democrats was little changed from last month. Critically, consumers appear worried that inflation will increase and proliferate beyond fuel prices, even in the long run.

Year-ahead inflation expectations inched up from 4.7% last month to 4.8% this month.

The current reading substantially exceeds the 3.4% reading seen in February 2026 prior to the start of the Iran conflict, along with all 2024 readings.

Long-run inflation expectations climbed from 3.5% in April to 3.9% in May, notably higher than the 2.8% to 3.2% range seen in 2024.

This month’s increase in long-run expectations reflects sizable jumps among independents and Republicans. For the latter group, long-run inflation expectations are currently more than double their February 2025 reading on a monthly basis.

Consumer Sentiment Hits A Record Low,” by Justin Wolfers

AB: Trump and Republicans leading us down the wrong economic conclusion.