Consumer sentiment in the U.S. dropped sharply in May, falling 2.7% to 50.8, according to preliminary data from the University of Michigan’s Consumer Sentiment Index. Rising inflation concerns are driving much of this pessimism. Trade policy uncertainty, particularly around tariffs, is also weighing heavily on consumers, with nearly three-quarters mentioning tariffs as a top concern.
Key Takeaways:
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Consumer sentiment has declined almost 30% since January 2025, reaching levels not seen since 1980.
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Inflation expectations have surged, intensifying consumer worries about the economy.
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Trade policy and tariffs remain major sources of uncertainty, overshadowing minor improvements from tariff pauses.
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