US consumer sentiment slumps to lowest level in nearly 11 years

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Gulf
  • Date: 14-May-2022
  • Source: Gulf Today
  • Sector: Retail
  • Country: Gulf
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US consumer sentiment slumps to lowest level in nearly 11 years

US consumer sentiment slumped to its lowest level in nearly 11 years in early May as worries about inflation persisted, but household spending remains underpinned by a strong labour market and massive savings, which should keep the economy expanding. The University of Michigan’s survey showed the deterioration in sentiment, which some economists said pushed it into recessionary territory, was across all demographics, as well as geographical and political affiliation. Gasoline prices and the stock market have a heavy weighting in the survey. Gasoline prices resumed their upward trend this month, setting an average record high of $4.432 per gallon on Friday, according to AAA. Fears that the Federal Reserve will have to aggressively tighten monetary policy to bring down inflation have unleashed a massive equities sell-off on Wall Street. “But confidence has been a poor guide to consumption growth in recent years, so we would not read too much into that signal,” said Michael Pearce, a senior US economist at Capital Economics in New York. “Just because consumers resent paying higher prices and are suffering limited availability doesn’t mean they aren’t still making those purchases.” The University of Michigan’s preliminary consumer sentiment index tumbled 9.4 per cent to 59.1 early

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