UMich final May US consumer sentiment 59.2 vs 57.7 expected

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  • Current conditions 64.9 vs 64.5 prelim (68.2 prior)
  • Expectations 55.4 vs 53.4 prelim (60.5 prior)
  • 1-year inflation 4.2% vs 4.5% prelim (4.6% prior)
  • 5-10 year inflation 3.1% vs 3.2% prelim (3.0% prior)

This is a great report all around, with sentiment not falling as far as the prelim data and inflation not as strong. A resolution to the debt ceiling should help even more, though the recent rise in interest rates could be a drag next month.

Comments in the report:

Consumer sentiment slid 7% amid worries about the path of the economy,
erasing nearly half of the gains achieved after the all-time historic
low from last June. This decline mirrors the 2011 debt ceiling crisis,
during which sentiment also plunged. This month, sentiment fell severely
for consumers in the West and those with middle incomes. The year-ahead
economic outlook plummeted 17% from last month. Long-run expectations
plunged by 13% as well, indicating that consumers are concerned that any
recession to come may cause lasting pain. That said, consumer views
over their personal finances are little changed from April, with stable
income expectations supporting consumer spending for the time being.

inflation expectations receded to 4.2% in May after spiking to 4.6% in
April. Uncertainty, as measured by the interquartile range of these
expectations has been elevated, averaging 7.8 over the last 12 months,
but fell this month to 5.7, the lowest level of uncertainty in almost
two years. This suggests that consumer views over short-run inflation
may be stabilizing following four months of vacillation. Long-run
inflation expectations inched up for the second straight month but
remained within the narrow 2.9-3.1% range for 21 of the last 22 months.