UMich final May US consumer sentiment 59.2 vs 57.7 expected

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UMich final May US consumer sentiment 59.2 vs 57.7 expected

• Prelim was 57.7
• Prior was 63.5

Details:

• Current conditions 64.9 vs 64.5 prelim (68.2 prior)
• Expectations 55.4  vs 53.4 prelim (60.5 prior)
• 1-year inflation 4.2% vs 4.5% prelim (4.6% prior)
• 5-10 year inflation 3.1% vs 3.2% prelim (3.0% prior)

This is a great report all around, with sentiment not falling as far as the prelim data and inflation not as strong. A resolution to the debt ceiling should help even more, though the recent rise in interest rates could be a drag next month.

The market reaction has been minimal.

Comments in the report:

Consumer sentiment slid 7% amid worries about the path of the economy,
erasing nearly half of the gains achieved after the all-time historic
low from last June. This decline mirrors the 2011 debt ceiling crisis,
during which sentiment also plunged. This month, sentiment fell severely
 for consumers in the West and those with middle incomes. The year-ahead
 economic outlook plummeted 17% from last month. Long-run expectations
plunged by 13% as well, indicating that consumers are concerned that any
 recession to come may cause lasting pain. That said, consumer views
over their personal finances are little changed from April, with stable
income expectations supporting consumer spending for the time being. Year-ahead
 inflation expectations receded to 4.2% in May after spiking to 4.6% in
April. Uncertainty, as measured by the interquartile range of these
expectations has been elevated, averaging 7.8 over the last 12 months,
but fell this month to 5.7, the lowest level of uncertainty in almost
two years. This suggests that consumer views over short-run inflation
may be stabilizing following four months of vacillation. Long-run
inflation expectations inched up for the second straight month but
remained within the narrow 2.9-3.1% range for 21 of the last 22 months.

                This article was written by Adam Button at www.forexlive.com.

Source: UMich final May US consumer sentiment 59.2 vs 57.7 expected

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