{"id":10938,"date":"2024-05-10T18:05:48","date_gmt":"2024-05-10T18:05:48","guid":{"rendered":"https:\/\/topat10.com\/?p=10938"},"modified":"2024-05-10T18:05:48","modified_gmt":"2024-05-10T18:05:48","slug":"inflation-and-unemployment-fears-send-consumer-sentiment-tumbling-to-a-6-month-low","status":"publish","type":"post","link":"https:\/\/topat10.com\/?p=10938","title":{"rendered":"Inflation and unemployment fears send consumer sentiment tumbling to a 6-month low"},"content":{"rendered":"\n<div data-cy=\"article-content\">\n<p>\u00a0U.S. consumer sentiment fell sharply in May to the lowest level in six months as Americans cited\u00a0<a href=\"https:\/\/apnews.com\/article\/inflation-prices-election-federal-reserve-rates-economy-f54d6af95e3eef434bddb72d25e3decf\" target=\"_blank\" aria-label=\"Go to https:\/\/apnews.com\/article\/inflation-prices-election-federal-reserve-rates-economy-f54d6af95e3eef434bddb72d25e3decf\" rel=\"noopener\" class=\"sc-330a5589-0 gPJZJS\">stubbornly high inflation<\/a>\u00a0and interest rates, as well as fears that\u00a0<a href=\"https:\/\/apnews.com\/article\/jobs-hiring-unemployment-economy-inflation-federal-reserve-07a321981752503e5299882805ed36c9\" target=\"_blank\" aria-label=\"Go to https:\/\/apnews.com\/article\/jobs-hiring-unemployment-economy-inflation-federal-reserve-07a321981752503e5299882805ed36c9\" rel=\"noopener\" class=\"sc-330a5589-0 gPJZJS\">unemployment could rise<\/a>.<\/p>\n<div class=\"paywall\">\n<p>The\u00a0<a href=\"http:\/\/www.sca.isr.umich.edu\/\" target=\"_blank\" aria-label=\"Go to http:\/\/www.sca.isr.umich.edu\/\" rel=\"noopener\" class=\"sc-330a5589-0 gPJZJS\">University of Michigan\u2019s consumer sentiment index<\/a>, released Friday in a preliminary version, dropped to 67.4 this month from a final reading of 77.2 in April. May\u2019s reading is still about 14% higher than a year ago. Consumers\u2019 outlook has generally been gloomy since the pandemic and particularly after inflation first spiked in 2021.<\/p>\n<p>Consumers\u2019 willingness to spend is a crucial driver of growth. Sour sentiment about the economy is also weighing on\u00a0<a href=\"https:\/\/apnews.com\/article\/joe-biden-scranton-pennsylvania-election-taxes-6b3de3a4807cbccdb5732442071f4f6e\" target=\"_blank\" aria-label=\"Go to https:\/\/apnews.com\/article\/joe-biden-scranton-pennsylvania-election-taxes-6b3de3a4807cbccdb5732442071f4f6e\" rel=\"noopener\" class=\"sc-330a5589-0 gPJZJS\">President Joe Biden\u2019s reelection bid<\/a>.<\/p>\n<p>In the first three months of this year,\u00a0<a href=\"https:\/\/apnews.com\/article\/economy-growth-inflation-gdp-consumers-federal-reserve-5a64d255a09313dabe54954060a09530#:~:text=WASHINGTON%20(AP)%20%E2%80%94%20The%20nation's,spending%20at%20a%20solid%20pace.\" target=\"_blank\" aria-label=\"Go to https:\/\/apnews.com\/article\/economy-growth-inflation-gdp-consumers-federal-reserve-5a64d255a09313dabe54954060a09530#:~:text=WASHINGTON%20(AP)%20%E2%80%94%20The%20nation's,spending%20at%20a%20solid%20pace.\" rel=\"noopener\" class=\"sc-330a5589-0 gPJZJS\">consumer spending stayed strong even as growth slowed<\/a>, likely fueled in part by\u00a0<a href=\"https:\/\/apnews.com\/article\/inflation-economy-wealth-rates-federal-reserve-cuts-9290216e89cbd7a3a0d2be66041aeaf8\" target=\"_blank\" aria-label=\"Go to https:\/\/apnews.com\/article\/inflation-economy-wealth-rates-federal-reserve-cuts-9290216e89cbd7a3a0d2be66041aeaf8\" rel=\"noopener\" class=\"sc-330a5589-0 gPJZJS\">upper-income earners<\/a>\u00a0with significant wealth gains in their homes and stock portfolios. The unemployment rate is at a historically low 3.9%, which has forced many companies to offer higher pay to find and keep workers.<\/p>\n<p>Yet big retailers have begun to sense more caution from customers, particularly those with lower incomes, who are pulling back on spending.<\/p>\n<p><a href=\"https:\/\/apnews.com\/article\/starbucks-earnings-ede9a1b6f756ba5b5b11bae90444df23\" target=\"_blank\" aria-label=\"Go to https:\/\/apnews.com\/article\/starbucks-earnings-ede9a1b6f756ba5b5b11bae90444df23\" rel=\"noopener\" class=\"sc-330a5589-0 gPJZJS\">Starbucks<\/a>\u00a0lowered expectations for its full-year sales and profit in late April after a terrible quarter that saw a slowdown in store visits worldwide. <a href=\"https:\/\/fortune.com\/company\/starbucks\/\" target=\"_blank\" aria-label=\"Go to https:\/\/fortune.com\/company\/starbucks\/\" class=\"sc-330a5589-0 gPJZJS\" rel=\"noopener\">Starbucks<\/a> reported a sharper and faster decline in spending in the U.S. than it had anticipated.<\/p>\n<p><a href=\"https:\/\/apnews.com\/article\/mcdonalds-boycott-earnings-75770857e452fab4032042c492fcc733\" target=\"_blank\" aria-label=\"Go to https:\/\/apnews.com\/article\/mcdonalds-boycott-earnings-75770857e452fab4032042c492fcc733\" rel=\"noopener\" class=\"sc-330a5589-0 gPJZJS\">McDonald\u2019s<\/a>\u00a0last month said that it will increase deals and value messaging to combat slowing sales. The Chicago fast food giant said inflation-weary customers are eating out less often in many big markets.<\/p>\n<p>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\u00a0<a href=\"https:\/\/apnews.com\/article\/inflation-prices-rates-economy-federal-reserve-biden-f02b969d1b44a7ccb0385be03f766de0\" target=\"_blank\" aria-label=\"Go to https:\/\/apnews.com\/article\/inflation-prices-rates-economy-federal-reserve-biden-f02b969d1b44a7ccb0385be03f766de0\" rel=\"noopener\" class=\"sc-330a5589-0 gPJZJS\">rose 3.5% compared with a year ago<\/a>, 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.<\/p>\n<p>The consumer sentiment survey found that Americans expect inflation will stay higher over the next year at 3.5%. Before the pandemic, consumers typically expected inflation a year ahead would be below 3%.<\/p>\n<p>The drop in overall consumer sentiment occurred across age, income, and education levels, the survey found.<\/p>\n<p>It also crossed political lines, falling among Democrats, Republicans and independents.<\/p>\n<\/div>\n<div class=\"sc-83cd12c6-0 gjLFAy article\" data-cy=\"subscriptionPlea\">Subscribe to the CFO Daily newsletter to keep up with the trends, issues, and executives shaping corporate finance. <a href=\"https:\/\/www.fortune.com\/newsletters\/cfodaily?&amp;itm_source=fortune&amp;itm_medium=article_tout&amp;itm_campaign=cfo_daily\" target=\"_self\" aria-label=\"Go to https:\/\/www.fortune.com\/newsletters\/cfodaily?&amp;itm_source=fortune&amp;itm_medium=article_tout&amp;itm_campaign=cfo_daily\" class=\"sc-330a5589-0 gPJZJS\" rel=\"noopener\">Sign up<\/a> for free.<\/div>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>\u00a0U.S. consumer sentiment fell sharply in May to the lowest level in six months as Americans cited\u00a0stubbornly high inflation\u00a0and interest rates, as well as fears that\u00a0unemployment could rise. The\u00a0University of Michigan\u2019s consumer sentiment index, released Friday in a preliminary version, dropped to 67.4 this month from a final reading of 77.2 in April. May\u2019s reading [&hellip;]<\/p>\n","protected":false},"author":421,"featured_media":10939,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[123],"tags":[],"class_list":["post-10938","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Inflation and unemployment fears send consumer sentiment tumbling to a 6-month low | Unlock Informed Choices with Us<\/title>\n<meta name=\"description\" content=\"The\u00a0University of Michigan\u2019s consumer sentiment index dropped to 67.4 this month from a final reading of 77.2 in April.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, 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Rugaber, The Associated Press","author_link":"https:\/\/topat10.com\/?author=421"},"uagb_comment_info":0,"uagb_excerpt":"\u00a0U.S. consumer sentiment fell sharply in May to the lowest level in six months as Americans cited\u00a0stubbornly high inflation\u00a0and interest rates, as well as fears that\u00a0unemployment could rise. The\u00a0University of Michigan\u2019s consumer sentiment index, released Friday in a preliminary version, dropped to 67.4 this month from a final reading of 77.2 in April. 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