Consumer Sentiment Hits Record Low as Fuel Costs and Inflation Expectations Rise

NEW YORK | U.S. consumer sentiment fell to a record low in May, according to reporting on the University of Michigan survey, as households absorbed higher gasoline prices, broader inflation pressure and uncertainty around the direction of the economy.

The decline matters because sentiment is not only a political number. It can shape how households think about travel, major purchases, debt, savings and everyday spending. When prices rise quickly, consumers may still spend on essentials while delaying bigger decisions or becoming more cautious about discretionary purchases.

Reuters reported that the May survey showed inflation expectations moving higher. That is the part of the report watched closely by businesses and policymakers because expectations can affect wage demands, pricing decisions and the Federal Reserve’s view of whether inflation is becoming more persistent.

Gasoline is one of the most visible prices in the economy. Even when wages are rising or the labor market remains stable, repeated fuel-price increases can change how households experience the economy because the cost is posted daily and affects commuting, shipping and travel plans.

The record-low reading lands during a volatile period for energy markets, interest-rate expectations and election-year economic messaging. The next round of inflation, retail sales and labor data will show whether sour sentiment is translating into a broader spending slowdown.

Additional Reporting By: Reuters; University of Michigan Surveys of Consumers