US Consumer Sentiment Revised to New Record Low

The University of Michigan’s Consumer Sentiment Index rose to 48.9 in early June 2026, up from May’s all-time low of 44.8 and above market expectations of 46. The modest recovery reflected some relief from early-month easing in gasoline prices, with improvements seen across age, education, and political groups. Lower-income consumers, for whom gasoline represents a larger share of budgets, showed a particularly strong increase in sentiment. Assessments of personal finances and business conditions both improved this month. However, despite June’s early gains, overall economic sentiment remains relatively low, 13% below January 2026 and 19% below a year ago, as consumers continue to focus on everyday financial pressures. Inflation concerns remain a key issue. Year-ahead inflation expectations edged down to 4.6% from 4.8% in May, while long-run inflation expectations fell to 3.4% from 3.9%. Consumers still worry that inflation could remain stubbornly high, particularly in the short term.

The University of Michigan’s Consumer Sentiment Index plunged to a record low of 44.8 in May 2026, revised down from a preliminary 48.2 and marking the third straight monthly decline, as Strait of Hormuz supply disruptions continued to push gasoline prices higher. The cost of living remained the top concern, with 57% of consumers spontaneously citing high prices as eroding their personal finances. Lower-income consumers and those without college degrees posted the steepest declines, as these groups are more sensitive to rising gas and essentials costs. Politically, Independents and Republicans saw sentiment fall to the lowest levels of the current administration, while Democrats’ sentiment showed little change. Critically, consumers grew increasingly worried that inflation would spread beyond fuel prices in the long term. Year-ahead inflation expectations edged up to 4.8% from 4.7%, while long-run expectations climbed to 3.9% from 3.5%.

The University of Michigan’s Consumer Sentiment Index dropped to a record low of 48.2 in early May 2026, missing market expectations of 49.5 and falling below April’s 49.8. The current conditions component declined about 9% to 47.8, driven by growing concerns over high prices affecting personal finances and buying conditions for major purchases. Meanwhile, the expectations index edged up to 48.5, though real income expectations continued their decline from March. About one-third of consumers spontaneously cited gasoline prices, and roughly 30% mentioned tariffs, underscoring that consumers still feel pressured by rising costs, particularly at the pump. Year-ahead inflation expectations eased slightly to 4.5% from 4.7%, while long-run inflation expectations dipped to 3.4% from 3.5%.