May 20th, 2024

US consumer sentiment drops to 6-month low on inflation, unemployment fears

By Christopher Rugaber, The Associated Press on May 10, 2024.

FILE - A shopper passes a display of televisions at a Costco warehouse on April 29, 2024, in Lone Tree, Colo. On Friday May 10, 2024, the University of Michigan releases its preliminary reading of consumer sentiment for May. (AP Photo/David Zalubowski, File)

WASHINGTON (AP) – U.S. consumer sentiment fell sharply in May to the lowest level in six months as Americans cited stubbornly high inflation and interest rates, as well as fears that unemployment could rise.

The University of Michigan’s consumer sentiment index, released Friday in a preliminary version, dropped to 67.4 this month from a final reading of 77.2 in April. That is still about 14% higher than a year ago. Consumers’ outlook has generally been gloomy since the pandemic and particularly after inflation first spiked in 2021.

Consumer price increases have been stuck at an elevated level this year, after a sharp drop last year from a peak of 9.1% in June 2022 to 3% a year later. In March, prices rose 3.5% compared with a year ago, up from 3.2% in the previous month. Federal Reserve officials have underscored this month that they will likely keep their benchmark interest rate at a 23-year high for as long as needed to get inflation back to their 2% target.

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