United States consumer sentiment has fallen to a record low in May as gas prices continue to surge amid the Iran war.
According to the University of Michigan’s Survey of Consumers, the consumer sentiment index dropped 3.2% month-over-month and 7.7% year-over-year to 48.2.
Economists surveyed by Dow Jones had been looking for 49.7.
Consumer expectations were up 0.8% month-over-month to 48.5, while current conditions were down 9% to 47.8.
Survey of Consumers director Joanne Hsu said this was driven by cost-of-living pressures and increases in gas prices.
“About one-third of consumers spontaneously mentioned gasoline prices and about 30% mentioned tariffs,” she said.
“Middle East developments are unlikely to meaningfully boost sentiment until supply disruptions have been fully resolved and energy prices fall.”
Hsu said year-ahead inflation expectations softened from 4.7% last month to 4.5% this month.
This still substantially exceeds the 3.4% reading seen in February, before the start of the war.
The survey was released just after the Bureau of Labor Statistics revealed that job creation as stronger than expected in April, with nonfarm payrolls rising by 115,000 and the unemployment rate holding at 4.3%.
However, soaring energy prices continued to be a problem. A gallon of regular gas averaged $4.54 nationally on Friday, up nearly 40 cents from a month ago and higher by nearly $1.40 from the same time a year ago, according to AAA.
