![]() Global factors continue to weigh on their inflation outlook: about 58% of consumers spontaneously mentioned supply shortages, though a falling share brought up Ukraine or Russia (13%, down from 20% in April).Īll told, inflation expectations remained elevated relative to a year ago but have held steady in recent months. While consumers generally anticipate wage gains over the coming year, about 49% of consumers overall expect their incomes to rise less than prices in the next year. Inflation was cited as the main factor for declining living standards over the past year, mentioned by 38% of all households, a frequency not seen since 2008. Looking into the long term, a majority of consumers (52%) expected their financial situation to improve over the next five years, similar to other readings this year.Īnticipated wage gains edged down slightly from April to an average of 1.8% overall, with those under 45 expecting a one-year gain in income of 4.6%. Less than one quarter of consumers expected to be worse off financially a year from now. While consumers expressed continued pessimism over business prospects, they were less downbeat about future prospects for their personal finances. “Feelings of personal stability may have supported resilience in spending thus far, but persistently negative views of the economy may come to dominate personal factors in influencing consumer behavior in the future, particularly if global factors, like supply chain issues, or income prospects worsen.” Relatively less pessimism for personal finances “While consumers appear confident about their own finances, they continue to voice strong concerns about the economy around them,” Hsu said. Overall, the sentiment index settled just one point shy of the March reading. ![]() Most of this decline was concentrated in expectations for the economy, with the year-ahead outlook dropping 25.8% and the five-year outlook falling 14.3%, said U-M economist Joanne Hsu, director of the surveys.įurthermore, consumers continued to express negative views on current buying conditions for houses and durables, primarily due to inflation concerns. After voicing more positive views in April, consumer sentiment fell 10.4% in May, reverting to levels comparable to two months ago, according to the University of Michigan Surveys of Consumers.
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