by Doug Short
The University of Michigan Final Consumer Sentiment for May came in at 95.8; it’s the highest reading in nearly a year and a 6.8 point increase from the 89.0 April Final reading. This is its largest increase since 2013. Investing.com had forecast 90.0.
Surveys of Consumers chief economist, Richard Curtin, makes the following comments:
Consumer sentiment rebounded in early May due to more frequent income gains, an improved jobs outlook, and the expectation of lower inflation and interest rates. The largest gains were recorded among lower income and younger households, although the gains were recorded among all income and age subgroups as well as across all regions. Nearly all of the gains were in the Expectations Index, which rose to its highest level in nearly a year. To be sure, the data still indicated the negative impact of uncertainty about future economic policies associated with the Presidential election, but its overall impact was overwhelmed by favorable economic developments. It is too early to judge the potential impact of the election on consumers’ expectations, and one month’s rebound in consumer confidence is insufficient to increase the current forecast for inflation-adjusted consumer expenditures from 2.5% during 2016.