Consumer Sentiment Falls to Six-Month Low as Inflation Expectations Rise

Consumer sentiment weakened to the lowest in about six months amid persistent worries over sticky inflation, unemployment and interest rates.

The University of Michigan index for consumer sentiment fell 13% to 67.4 in May, from 77.2 a month earlier, according to preliminary results. That missed the average estimate of 76 expected on Wall Street.

Inflation expectations for the year ahead rose to 3.5% from 3.2% a month earlier, data showed. Long-run inflation expectations advanced to 3.1% in May from 3% in April.

"While consumers had been reserving judgment for the past few months, they now perceive negative developments on a number of dimensions," Joanne Hsu, surveys of consumers director at the University of Michigan said in the release. "They expressed worries that inflation, unemployment and interest rates may all be moving in an unfavorable direction in the year ahead."